Around $700/ounce is a certainty in gold by 2015 to 2016, and $250 is a possibility well down the line by 2020–2023. His forecast is largely based on his belief that deflation will prevail.If crude reaches a long-term equilibrium below $40 a barrel, there's hardly any way to avoid the cratering of the gold price bubble.
Ah, I see we have someone with a sense of history. Generally (until recent wild price swings) 1 oz of gold would buy 10 barrels of oil. That equation has held true for a very long time (before the irrationality of the commodity markets in 2007, at least). Given that understanding, oil at $40/barrel should give us a value for gold at $400/oz.
Some things have changed, though... for example, gold has more industrial, high-tech uses these days and oil has become more plentiful with modern extraction technics. Back in the old days, gold was mainly used as a storehouse of value. The increased industrial demand will likely give gold a premium over its historical valuation relative to oil so I maintain my price target around $700/oz.