You might remember that Doug Kass told us last month that gold was going to be among the worst asset classes in 2011.
Well, if you’re long, you might want to fasten your seatbelt. Kass thinks you're in for a bumpy ride! He thinks you’re looking at more downside – a lot more – about $300 dollar’s worth.
”I think gold experiences wild volatility in price this year. I think it briefly touches $1050 an ounce and ends the year $150 an ounce lower than where it is now,” Kass says in a live interview on CNBC’s Fast Money.
We know it's kind of a dire prediction from the widely followed president of Seabreeze partners and CNBC Contributor. And yes, we also know that Kass is a bit of a bear. But he has a rather uncanny track record.
Less than a week before the S&P 500 hit a generational low of 676 on March 9, 2009, Kass went on CNBC and predicted the bottom. Also, on July 6, 2010, he said the market had made its lows for the year and that also proved to be true.
Now back to gold - Kass is bearish because he doesn’t see a catalyst that can drive it higher.
”When an asset class has climbed from $250 an ounce 11 years ago to $1340 and ounce now - compounding at 17% annually - you need very compelling reasons to own it and I think the reasons have substantially diminished,” he says.
How about the inflation argument – after all hasn’t the Fed made inflation a cornerstone of their strategy to restore the economy. But to that, Kass says balderdash,
“Clinging to the inflation, money printing thesis,” is a pipe dream for the gold bugs.
He thinks signs are emerging that inflation will be rather tame.
”Non-US central banks are hiking interest rates, they're restricting credit and it seems likely that our Fed is nearing the end of quantitative easing.”
What’s the bottom line?
Perhaps this Kass-ism sums it up best. "Bulls think gold is god without the letter 'L' but they’re wrong for worshipping at its alter.”
What do you think? We want to know!
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Trader disclosure: On Jan. 21, 2011, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders;
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