The Four Horsemen of the gold price apocalypse - Lobo Tiggre
Lobo Tiggre, of The Independent Speculator, is long-term bullish on gold, but said that it is nonetheless important to consider four potential bear cases.
The first one is Bitcoin pulling funds away from gold. Tiggre said that this is unlikely.
“There is some liquid capital that chases after the flavor of the day and when Bitcoin is soaring then some of that capital is going to go into Bitcoin,” Tiggre told David Lin, anchor of Kitco News. “But, if you look at the data, Bitcoin even now having reached $1 trillion is still a very small market. Let’s say that all of the money, every single dollar that’s gone into Bitcoin came out of gold, and of course it didn’t…gold’s a $10 trillion, Bitcoin is now a $1 trillion market, that would make a 10% difference.”
The next case is deflation, and specifically, lower consumer prices.
“I think there’s a reasonable chance we could get that in the near-term,” Tiggre said. “I really think that it’s very unlikely, in any significant degree, less than 50%, going forward beyond that. In part, because of this post-COVID rebound.”
The third possibility is price manipulation, although this again is unlikely the main reason for depressed gold prices.
Tiggre wrote in a report “I do see plenty of manipulation in the gold and silver markets. This doesn’t prove that it’s a central bank conspiracy…Regardless, manipulation didn’t stop gold from rising to $850 in 1980, to $1,900 in 2011, or to $2,063 last year.”
Last, investment demand for safe haven assets could wane, Tiggre said, noting that “irrational exuberance” in the equity markets could pull money out of gold.