The Austrian Theory of Gold Debunked: If Gold, Why Not Cows?
Article published 9th Feb by Andrew Butter 0 comments
Alan Heap, an analyst at Citi Investment Research, recently broke with the dominant bullish view about gold by saying in a research paper, "Gold: Paper Problems," that prices will sink to $820 by June of 2014 and head lower long term to $700 an ounce.
“Alan Heap.. adds a bearish voice to a crowded debate over where the precious metal is headed. Billionaire investor James Rogers and perma-bear David Tice say gold will hit $2,500. James Turk, Author of GoldMoney, predicts $8,000, while author Mike Maloney is betting on $15,000”, The Street.com:
The biggest threat to rising gold prices is a substantial decrease in long positions in paper markets, Heap writes in his report.
"Positions held by money managers and broader non-commercial positions have fallen since November 2009 when the USD strengthened. Non-commercial net long positions are at 5x the average levels seen over the last 17 years." [1]
So is this another “brick in the wall” of the Austrian theory which was supposed to deliver us from the tyranny of fiat money?
....
About Andrew Butter
I am managing partner of ABMC, an investment advisory firm based in Dubai that I set up in 1999, and have been involved advising on large scale real estate investments, mainly in Dubai.
I spent twenty years doing market analysis and valuations for investors in the Middle East, USA, and…
read more
More by this Author
Recent Articles
