Gold News

Clang! Clang! $400 Gold Warning

Phew! That was a close call from our tenured "contrarian gold" indicator...


YIKES! FOR ONE
horrible moment just then, I thought maybe the top was in.

"Gold has become the favored hedge against financial and monetary uncertainty," said Niall Ferguson, Harvard University and Business School's financial history professor, on Monday.

"It's certainly a time-tested way of coping with really turbulent markets."

Oh crikey! Niall Ferguson – our tenured contrarian gold indicator – now says gold is a proven defense against investment stress. It's taken 11 years and 356% gains in gold, but he's finally got it.

That's the top. Sell! Oh, hold on...

"But a lot of the upside is already there," Ferguson went on, live by video-link to the Wall Street Journal.

"The time to buy was in 1999, not 2010."

Phew! As you were, then, bloody-minded gold buyers. And as you relax, safe in the knowledge that Professor Wrong still says you shouldn't buy, let's remind ourselves just what it was he advised 11 years ago – back in 1999 – the "time to Buy Gold" as he now puts it...

"The twilight of gold appear[s] to have arrived. True, total blackout is still some way off...Gold has a future, of course, but mainly as jewelry."

Fast forward to late 2008 – some $445 higher per ounce for gold, slap-bang amid the post-Lehmans Crash crisis – and Professor Ferguson was at it again.

"I have been debating today whether Gold Bars really are the answer," Ferguson confessed to the New York Magazine when quizzed about his portfolio for one of many puff pieces that November.

But "they probably aren't," he decided...thereby leaving another $470 per ounce on the table over the last 18 months.

Now he says early summer 2010 is not the time to Buy Gold either. So, given what happened when he rejected the idea in mid-1999 and then in late 2008, expect another $400-or-so on the price before the Laurence A.Tisch Professor of History next weighs in with his forecast.

And meantime, the man whose last TV-and-book blockbuster, The Ascent of Money, concluded that "the state-owned bank [was] now close to extinction"...just as the UK nationalized one-third of its finance sector, and the US Fed bought $2 trillion of failing bank assets...now advises that "There are other ways to protect yourself, and maybe somewhat smarter ways."

Missing the point entirely again, Ferguson recommends – instead of gold – buying Norwegian and Swiss government debt as protection against...ummm...the sovereign debt crisis.

Clang! Clang! Everyone out!

Ready to Buy  Gold...?

Adrian Ash is director of research at BullionVault, the world-leading physical gold, silver and platinum market for private investors online. Formerly head of editorial at London's top publisher of private-investment advice, he was City correspondent for The Daily Reckoning from 2003 to 2008, and he has now been researching and writing daily analysis of precious metals and the wider financial markets for over 20 years. A frequent guest on BBC radio and television, Adrian is regularly quoted by the Financial Times, MarketWatch and many other respected news outlets, and his views from inside the bullion market have been sought by the Economist magazine, CNBC, Bloomberg, Germany's Handelsblatt and FAZ, plus Italy's Il Sole 24 Ore.

See the full archive of Adrian Ash articles on GoldNews.

Please Note: All articles published here are to inform your thinking, not lead it. Only you can decide the best place for your money, and any decision you make will put your money at risk. Information or data included here may have already been overtaken by events – and must be verified elsewhere – should you choose to act on it. Please review our Terms & Conditions for accessing Gold News.

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