Hedge fund manager Doug Kass has won over fans for his CNBC appearances and successful short selling ideas. So when he suggested betting against gold in 2011, he got some attention. Just about everyone on Wall Street and their grandmother was bullish on the lustrous metal last year. And most expected a good 2011. But before the New Year, Kass called an end to the party. After trading around $1,350 an ounce to start the year, he said gold would soon fall $250 in a single month and settle at year's end between $1,100 and $1,200 an ounce.
Kass said a host of things could send it downward: investors getting comfortable with an inflation-free economic recovery; higher interest rates; rising world stocks; even the U.S. government addressing the debt problem. None of those happened, and gold kept rising. Prices hit $1,900 an ounce in late summer before recently settling near $1,600. Kass told blogger Barry Ritholtz in October that he understands the rationale behind owning gold. But since he can't figure out what it's actually worth, he won't own it. Notably, he didn't predict another fall.
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