Bullion's speculative trade near its end: World Gold Council

The exodus out of gold this year, triggered by heavy exchange traded fund (ETF) selling, may nearing its end, according to an executive at the World Gold Council (WGC), who expects prices to pick up towards the end of 2013.

"We feel that speculative money has largely come out of the gold market. We feel that gold is nearer the bottom than the top right now. You'll see a stronger market towards the end of the year, and into next year," Marcus Grubb, managing director of investment at the WGC told CNBC on Tuesday.

Investors in gold ETFs have sold around 650 metric tons of bullion gold so far this year, driven by improving prospects for U.S. economy and expectations for a tighter monetary policy in the country. This is equivalent to the amount that rushed into the market eight months after the collapse of Lehman Brothers when investors were searching for a safe haven, he explained.

Contrary to what many believe, Grubb says that higher interest rates will not be negative for the precious metal.

"A lot of analysis shows if real rates stay between 0-4 percent, gold can return about 7-8 percent per annum or more. That's our point of difference with the longer term bear view of gold, even rising rates could be positive if real rates aren't too high," he said. Rising rates imply higher borrowing costs and are seen as negative for gold, which is an asset that does not pay interest or a dividend.

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