As gold prices continue to rise, one analyst told CNBC Wednesday that he favors investing in oil rather than the precious metal as a hedge against economic uncertainty.
“I think the fundamentals of oil are much more solid,” said Larry Adam, of Deutsche Bank Private Wealth Management. He said he thinks the gold prices have gone too high.(Watch Adam's comments here).
“If you look at the pillars of what drives gold [prices], a lot of them have been taken off the table,” he added.
Gold has been trading above $1,200 an ounce. Adam said that investors sink their money into gold when the US dollar is weakening and inflation is rising, but neither of those situations are happening now.
“The only thing holding up gold right now is uncertainty,” he said. “When that starts to fade, it will have negative consequences for gold.”
As others rush to buy gold, Adam's forecast is the minority opinion. Among those bullish on gold is Frank Holmes, U.S. Global Investors chief investment officer, who predicted this week that gold could reach $2,300 an ounce within the next five years, or even earlier, depending on economic factors.