The gold price has been the subject of much debate in Davos as gold price bulls and gold price bears sparred over its next move. Given the outperformance of the gold price relative to most assets over the past decade, the gold sector has increased in popularity as an investment class. Several gold mining executives and high-profile institutional investors were asked to share their views on the price of gold at the annual World Economic Forum in Davos, Switzerland. High-ranking corporate officials of two of the largest gold producers in the world - Canadian-based Barrick Gold (ABX) and U.S.-based Newmont Mining (NEM) - offered a bullish outlook while legendary investor George Soros called gold a bubble.

At an interview in Davos, Peter Munk, Chairman of Barrick Gold - the largest gold mining company in the world - told Reuters Insider television that the gold price “will stay volatile and its upward climb is not over.” The Chairman of the Canadian-based gold miner went on to say that the price of gold “may fluctuate, but to us and I think to our investors, the key criteria should be that it’s got a secular tendency now to move up year in and year out.”

Echoing Mr. Munk’s bullish comments was Richard O’Brien, CEO of Newmont Mining - the largest gold mining company in the U.S. In an interview with Reuters at the Forum in Davos, Mr. O’Brien forecast that the gold price would, over the longer-term, rise to between $1,250 and $1,500 per ounce. Over the course of the coming year, the Newmont’s CEO stated that the price of gold could advance as high as $1,300 and as low as $1,025, but any price under $1,025 would not be sustainable due to underlying demand for gold, particularly given its attractiveness as an hedge against inflation, as a safe-haven asset, and as an alternative to fiat currencies.

In contrast to Mr. Munk and Mr. O’Brien was commentary from George Soros. Regarded as one of the most successful hedge fund managers of all-time, Mr. Soros’s views are widely reported and widely respected in the global financial community. Soros warned that the risks of future asset bubbles were high due to low interest rates from central banks such as the Federal Reserve, European Central Bank, and Bank of Japan, amongst others. Moreover, he cautioned that these asset bubbles could likely lead to further crashes - similar to what occurred in the fall of 2008. Soros went on to say that “when interest rates are low we have conditions for asset bubbles to develop, and they are developing at the moment. The ultimate asset bubble is gold.”

Beyond the brief mention of gold as the “ultimate asset bubble,” Mr. Soros did not elaborate on the timing of a potential fall in the gold price or provide any price targets. Many were surprised to hear such bearish remarks from the legendary investor, as he has at other times over the past decade indicated his bullish view on the price of gold given the unprecedented money printing activities of the Federal Reserve and foreign central banks. Nevertheless, it appears that given the rapid ascent in the price of gold over the past decade, there is a growing contingent of investors who believe the bull market in gold may be far closer to its end than beginning.

As the World Economic Forum draws to a close, investors will undoubtedly continue to read and hear further speculation on the next direction of the gold price. Short-term price oscillations are driven by numerous factors, many unrelated to the fundamentals of gold and gold mining stocks - a fact true for any investment. From a fundamental perspective - taking a longer-term view - although the price of gold has advanced significantly over the past ten years, it continues to benefit from a positive macro-economic backdrop. Gold mine supply is continuing to decline, while the chief driver of gold prices, investment demand, has risen on fears of the eventual consequences of global central bankers aggressive efforts to prevent deflation. Yesterday, the Federal Reserve and Chairman Bernanke vowed once again to keep interest rates at record lows for an “extended period” of time. Lastly, skepticism along the lines of George Soros’ remarks is often a healthy ingredient for any bull market - as asset prices climb the proverbial “wall of worry.”