Monday, January 25, 2010

Gold Skeptic Returns, With Same Message

After receiving some voluble - and, using his own word, "cogent" - criticism for his earlier thumbs-down on gold, the Toronto Star's David Olive has returned to the same theme. This time, he points to other commodities that have rose at a greater rate than gold has in 2009. Not mentioned is the fact that those commodities (unlike gold) were down hugely in 2008.

He's softened his tone, but the message is still the same. Of interest is his quote of Doug Kass near the end of his piece:
The gold bears seem more certain of themselves. Doug Kass, forecaster at, includes among his forecasts "the price of gold topples" to $900 by the beginning of the second quarter of 2010, and "the U.S. dollar explodes higher." That latter would be bad for gold; its upward momentum has been tied to expectations of the greenback cratering.
Doug Kass is the same person who said that U.S. stocks presented "the buying opportunity of a lifetime" right at the March lows. He's a short seller by trade, and he seemingly sees a short-term shorting opportunity in gold. His bullish prognostication for the U.S. dollar, given its recent performance, is plausible.

However, confident bears and skittish bulls make for picture that's consistent with an oversold market.

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