#2 - Gold to decline

#2 - Gold to decline

Since I am so skeptical of the new currencies, one might expect that I would be very positive about that most traditional store of value -- Gold.

However, although I do accept that gold has intrinsic value through its commercial uses (including jewellery), I do not readily agree that it has a genuine place as a banking reserve etc.

I do not think it is plausible, even in principle, for modern economies to base their currencies on gold and I don't even think that in an Armageddon scenario there would be a great demand for gold. 

I know that there are strong opinions on gold - in both directions.  I count myself amongst the non-believers.  As to what is a sound price for gold, this is not clearcut. 

I don't have any explicit valuation method to offer, and I certainly have no difficulty with the idea that a useful commodity in limited (albeit sufficient) supply has a significant value.  But as to what dollar price this means, I can't say, but I observe that the price has risen substantially from some earlier reference points and I assume that some of this rally has been caused by what I consider to be unsupported cases for the Gold bulls.

So, my view simply has to be that the price is due to fall.

Call - Gold price to decline in 2015
Prediction - Gold to fall to US$ 1,100/oz
Trade - short Gold
Conviction - Medium
Feasibility - High