Bull Case For Gold Has Not Changed: Jim Rickards
Gold bugs are having a tough time defending the so-called "yellow metal" these days. The price of gold has fallen nearly 24% since the beginning of the year and more than 30% from its peak in August 2011. Last week spot gold had its worst weekly performance in nearly two years. Comex gold is down more than 3% in early trading Wednesday, it's lowest price in almost three years.
Credit Suisse, HSBC, Morgan Stanley and Goldman Sachs have all cut their forecasts for gold. Goldman slashed its year-end estimate by 9% to $1,300 an ounce. Goldman says gold could reach $1,050 an ounce by the end of 2014, 17% less than the firm's current forecast.
HSBC also lowered its average 2013 price by about 9% to $1,396 an ounce and set its 2014 price at $1,435 an ounce.
Related: Gold Prices Collapse As Everyone Remembers It’s Just Yellow Metal: Blodget
Jim Rickards, author of “Currency Wars” and a senior managing director at New York financial firm Tangent Capital, argues that investors should not lose sleep over the recent selloff.
“The fundamental bull case for gold has not changed at all,” he says in the accompanying video.
Related: Gartman: Three Reasons Why Gold Is Going Lower
Investors flocked to gold during the 2008 financial crisis because of its perceived safe-haven status. But low inflation, stronger-than-expected economic growth, concerns that the Fed will reduce its asset purchases and a rally in equities have pushed down the price of gold.
Watch the video above to find out what Rickards calls the Fed’s “worst nightmare.”
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