We propose an algorithm that predicts potentially missing Gene Ontology annotations, in order to speed up the time-consuming annotation curation process. The proposed method extends a previous work based on the singular value decomposition of the gene-term annotation matrix and incorporates gene clustering, based on gene functional similarity computed by means of the Gene Ontology annotations. We tested the prediction method by performing K-fold crossvalidation on the genomes of two organisms, Saccharomyces cerevisiae (SGD) and Drosophila melanogaster (FlyBase). Keywords-Annotation prediction; Singular Value Decomposition; gene similarity metrics