DOUG KASS: GOLD WILL FALL 25% IN 2011

Doug Kass of Seabreeze Partners says gold is going to be highly volatile in 2011. He says prices will routinely move $75-$100 on a daily basis and that prices will “plummet” 25% at some point in 2011 compared to today’s closing price.

Source: CNBC

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Cullen Roche

Mr. Roche is the Founder of Orcam Financial Group, LLC. Orcam is a financial services firm offering research, private advisory, institutional consulting and educational services.

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Comments

  1. Doug’s gold prediction for this year.

    http://blogs.barrons.com/stockstowatchtoday/2009/12/21/doug-kass-2010-predictions-goldman-goes-private-buffett-steps-down-and-tigers-back/

    4. The price of gold topples. Gold’s price plummets to $900 an ounce by the beginning of second quarter 2010. Unhedged, publicly held gold companies report large losses, and the gold sector lies at the bottom of all major sector performers. Hedge fund manager John Paulson abandons his plan to bring a new dedicated gold hedge fund to market.

  2. no rationale

    pro high prices:
    – currency defiance
    – inflation fears
    – a real asset class now accessible ot anyone via ETF
    – supported by momentum (bank selling related products)
    – let’s correct gold prices of inflation and express it in stock and other assets terms, is it the highest we have ever seen ?

    con:
    – inflation is not there
    – if prices increased based on fear, recent econmic development, even though not brilliant, indicates double dip is out of the picture and we are on the track of a sluggish recovery
    – even expressed in terms of other asset classes prices, gold price is near peak level.
    – non income bearing securities (e.g TPC recent good post about commo)

    unknown things to me :
    – what are central banks and gold producers (via their hedge program) going to do ?
    – How could we correct prices of gold of the “new” demand (not related to particular market views i.e the new asset class effect) ? i mean that out of the x% price increase since 3 years, a part of it is here to stay even is we were to encounter glorious days of growth
    – how is demand now caegorised (for example have a look at this graph,http://www.azom.com/Details.asp?ArticleID=1899, dating back in 01, how does it look lie today ?)

    How does it articulate ?

    – ccy defiance shall cool down once europe has set up its mecanism
    – yet inflationnistas and other austere people will continue to yell that govt are too highly indebted and that it is hyperinflationnary. Even though figure shows it is not, since this belief seems to be implanted deeply in human reptilian brain, they will have an audience.
    – “new” demand is fully priced in

    i’m out of ideas to complete this

  3. “Gold is going to break below $900,” he said. “It’s one of the most crowded trades.”…dougie nov. 2009 …..thats ’09…..broken record

    dougie has had his share of wrong moves…..tho he called ’07 bottom , missed the may ’10 runup i believe.

    but i don’t doubt increased volatility in gold in ’11 tho if it touches $999 it’l be for an hour….GS said $1700 by dec ’11 i believe.

    with the Eur on a collision course to 5″ headlines i max the cards out at 999…… n i have never had a monthly carried forward balance.

    its just my take on it.

  4. Doug Kass is doing a series of “bold predictions” on CNBC (this is like the 5th or 6th iteration or something). They’re all fairly ridiculous – effectively defining the term “infotainment”.

    However … the most even-handed, rational discussion of gold I’ve read in years:
    Howard Marks of Oaktree Capital provides a nice two-sided look at current gold valuations
    http://www.scribd.com/full/45620191?access_key=key-atzok91kdp9obtl02vm
    (sourced via plan b economics)

    Hmmm … deleted by user … alright, this link still seems to work …

    http://www.zerohedge.com/sites/default/files/All%20That%20Glitters.pdf

  5. Gosh, the more I read from this site, more I convinced gold is going to moon, most rational people will reach same conclusion I think. 25% correction is really a gift to go all in.

  6. Gold down ? Yes, I agree.
    gold down to $ 900 ? that remains to be seen.

    If gold goes down to $ 900 then we’ll see a giant gap between the futures and the price for the realnthing (i.e. gold bullion).

  7. Just from tracking Kass’s calls fairly closely over the past three years, I find overall he’s shrewd, tends to be right on the fundamentals and nails lows with unerring accuracy – but he’s often early at tops.

    Stayed bearish right through ’07 – ’09 and called the ’09 bottom on live TV a couple of days before it hit. He called the ’10 low in July / August too. His natural inclination is contrarian bearish so often seems to leave a bull party quite early, eg. pre-January ’10 correction. He’s not a stopped clock though guys, he’s the real thing.

  8. Gold down ? Yes, I agree. gold down to $ 900 ? that remains to be seen. If gold goes down to $ 900 then we’ll see a giant gap between the futures and the price for the realnthing (i.e. gold bullion).

  9. Kass’s “predictions” are not meant to be traded on. He uses them as an intellectual exericise to think outside the box for “possbile improbables” in order to hedge against such tail risks