Tiberius Group’s CEO warns of gold price correction

Gold is overpriced and could fall below $1,000 an ounce once bullion loses its safe-haven advantage over metals with stronger fundamentals, said the head of European commodity hedge fund Tiberius Group.

Christoph Eibl, CEO and founding partner of the Swiss firm, said that gold investment currently offers investors a psychological protection against economic uncertainties, but gold “has nothing to offer” in the long run.

Eibl said investors are better off investing in platinum group metals, with their market fundamentals more attractive because both platinum and palladium are likely to remain in or close to deficits.

“From a strategic long-term perspective, you don’t want to be investing in precious metals,” referring to gold and silver, Eibl told Reuters Monday on the sidelines of the London Bullion Market Association (LBMA) annual conference in Montreal.

“The moment when you have no ETF buying or investment buying, who would buy your gold? Not the Indians, they will not jump in at these levels,” Eibl said.

Asked how low the gold prices could fall, he said “Below $1,000″ an ounce, which better reflects bullion’s production cost.

Spot gold traded at around $1,780 an ounce on Tuesday. The price of gold has rallied furiously in the past ten years. The metal traded at just $250 in 2001.

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Posted by VBN on Sep 21 2011. Filed under Gold. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry