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Chart Prophet Capital Director Yoni Jacobs on why he expects a big decline in gold prices and how investors can profit from it.
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I'm wearing silver hoops today.
-- -- but that's your indicator it's been a wild ride for gold the precious metal is up more than 450%.
Over the past ten -- just an incredible performer no denying that.
But gold has extended losses into a third day announced sometimes these trends are indicators of what we'll let's ask my next guest because he thinks that the bubble is ready to -- -- -- the bubble well yeah Tony does he says gold will sink.
On your screen to 700.
Dollars in five years -- Jacobs is the director of underweights 1766.
Right now.
He's the director and chief investment strategist at chart prophet -- -- capital.
Are the gold.
Let's just -- for -- for this call -- when you make an extreme prediction like this I think people.
You know people are shocked.
Why do you think that this is going to happen especially at a time when there's so much cash sloshing around thanks to central banks and that of course.
Is very negative for currencies and positive for -- and that's the reason why a lot of people bought gold especially since 2000.
We -- out there at about 250 dollars announcing that Central Bank printing I have volatile markets you have currency devaluation of people are you saying that's over speculation.
But now it's where -- over speculative period I think that -- that we're at a point where this is already priced spent.
Did the fundamental reasons for buying gold were were correct.
But once we get up 600% from the from the 2000 -- -- Thousands of percent from you know 1970s.
Up for such something that's must be a stable asset.
I think that's -- -- -- -- Parabolic price increases except that it's it has felt a little steady -- hasn't knocked over the past several years it's still if you look at the charts really.
Parabolic like this and rightly so let's show the ten year chart of Goldman we can move on to the discussion about the fact that people treat it.
-- -- Some special type of magical substance you say it should be treated as a simple commodity well it is it is more valuable than a lot of other commodities it is historically.
A more important than other commodities.
Problem is that once you start relying on something you know just like they -- in housing they said people will always need housing it's a stable asset class.
And you know once -- who everyone starts jumping to a certain asset class and everyone's doing it.
In a longer serves seem perfect -- to credit trader or anybody can stand where you're standing and make a while prediction.
But we need to know if there are people watching who believe in what you're saying.
How -- they actually make money off that belief what are you recommending as far as an investor -- opportunities concerns.
Well so what we're viewed as most do expect inflation we're we're viewing it as if we have another recession which a lot of gold bugs are even willing to admit.
There will be deflationary scenario which means that the prices of almost everything will fall just like oil and copper that I short something what commute in so we're we're shorting the gold -- said GD acts.
For people who don't wanna take too much risk shorting if we we recommend put options on -- -- But I know some people don't want to take you know full.
-- risk just with one short place so we're doing a pair trade we -- we believe that gold will fall -- platinum.
Diamonds natural gas and and home builders will outperform Chris -- once again on your screen.
He says short the gold miners but possibly better than gold.
Diamonds natural gas how much -- I'm waiting for the big move in that a lot of people of components of that and the metal platinum I do want to point this out.
Net long positions have been building seven weeks in a row for gold.
That tends to show what he says enough to -- attorney would stand thank thank you thank you very much -- Jacobs is chief investment strategist at chart.
Profit capitalized cyclists have to wait around five years to -- -- your prediction comes right at 700 bucks and five years.
