The Bear Case on Gold

Posted by Charles Sizemore

Share on Facebook

Tweet on Twitter

The Bear Case on Gold

It’s always important to hear the other side’s arguments – especially in the case of gold, where exuberance has bordered on the irrational, amid all-time highs and a decade-long secular bull market.

Why I Still Don’t Like Gold

Those of us who like to style ourselves as contrarians are never “wrong.” We’re just early.

At least that is what I keep telling myself. I’ve had a bearish view on gold for most of 2010, and attempted (unsuccessfully) to short it in the second quarter. “I was just early,” I told myself. And alas, given gold’s recent move to all-time highs, it appears that I still am.

In August, I penned a negative piece on gold for Seeking Alpha that resulted in me getting quite a bit of hate mail (see “Sell Gold Now”).

I must admit, I sometimes have a hard time suppressing my emotional side as an investor. This is why I titled this article “Why I Still Hate Gold.” It irks me that I have lost money speculating against the yellow metal, and so I want it to fall. And then it irks me even further when I realize that I’ve allowed my emotions get the better of me.

So, fully acknowledging my own psychological shortcomings, let’s take a quick look at the bullish arguments for gold:

….read more HERE