When you hear calls for US$1,500 gold within 12 to 18 months, you assume they're coming from the usual gold bugs. They do that kind of thing all the time. But in this case, it's coming from a much more objective source: National Bank Financial.

Chief economist Clément Gignac, who has been bearish on the U.S. economy for ages, lays out five reasons why gold is making a comeback as an investment haven and should reach his lofty US$1,500 an ounce target: financial instability, massive injections of liquidity and a return to negative interest rates, the declining value and roll of the U.S. dollar, swelling U.S. budget deficits and inflation expectations, and increased financial demand for gold as a distinct asset class.

None of these factors will come as a shock to anyone, but Mr. Gignac figures they will combine to keep the upside pressure on bullion well into the future.

"We think gold has attractive potential for appreciation and, especially, as a tool for medium-term portfolio diversification via gold stocks or gold ETFs," he wrote in a note to clients. "The current price of crude oil, around US$90 a barrel, is about the same in constant dollars as the late-1970s high. Our new gold target of US$1,500 an ounce is still far from the early-1980s high of US$2,200 in constant dollars."

Peter Koven