NEW YORK (Commodity Online): Gold may be headed downward to $1000 an ounce within three years as a potential surplus in the commodity will see lower prices as investor demand saps off, according to Christoph Eibl, founding partner of Tiberius Asset Management said in an interview to Reuters.
COMEX gold is trading around $1750 after prices had peaked to $1920 and subsequently crashed to $1530 in a global sell-off triggered by risk aversion.The investor sentiment has been mixed with some believing that gold will propel to $10,000/oz on the global recession while others maintaining that gold prices are too high.
Positive indications from the US, especially a strong Q3 GDP and company earnings have been negative for gold.
Eibl says that gold and silver will crash eventually and actually prefers platinum because it is now for the first time in years, cheaper then gold.
'A surplus in gold will lead to price falls three years from now and investors should focus on the supply side of commodities like copper and oil' Reuters sums up Christoph's advice in an interview.
Eibl advises investors to focus more on the supply issue of a commodity than blindly looking into the demand picture. He argues that gold is stored via ETF's and in vaults. And ultimately when the gold bubble bursts, prices will come down.
This is unlike other commodities like copper and oil, where the supply in very tight. Copper is in fact in deficit for 2011 and will be so in 2012. For oil, the scenario is unlike 2008, where inventories were higher. Today oil inventories have come down and this provides a strong case for bullishness.
