Where is the gold price heading in 2006?

Gold prices endured a slow and painful decline from 1980 to 2000, which makes it tempting for gold analysts now witnessing its meteoric rise to call the top of the market too early, says Ross Norman of TheBullionDesk.com. But he believes there's much more mileage in the gold story - and plenty of gains left for investors yet to jump on the gold bull...

Gold prices and indeed volatility fell for a generation (between 1980 and 2000) and they have subsequently bounced and recovered roughly half that ground over the last five years. It is perhaps tempting, after such a slow and painful decline, for gold analysts and traders now considered mainstream and in the sexier end of the investment world to anxiously call the top of the market too early. A recent poll of leading bullion analysts seems to think so we don't.

Perhaps more disconcertingly the market appears to have migrated from something that one could readily measure and weigh according to a fairly reliable set of fundamentals into one where the tide shifts less to natural market forces and more to what may be described as the "madness of crowds". This brings with it higher degree of forecasting uncertainty and in this article we try to identify some of those features that the new participants to gold may be looking at and its possible impact on the price outlook for the next 12 months.

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