It's Time to Short Gold: Jeffrey Currie

It's Time to Short Gold: Jeffrey Currie

The summer is often a slow time in the resource space, with many market participants taking the old adage "sell in May and go away" to heart. As a result, investors tend to look forward to September, when prices and market activity typically pick up.

However, as Gold Investing News reported earlier this week, that didn't happen this time around, at least for gold. The yellow metal sunk to an 11-week low on Tuesday, hitting $1,261.80 per ounce as buying spurred by tension in the Middle East and Russia was tempered in large part by a stronger dollar.

At the time, Ross Norman, chief executive of Sharps Pixley, explained, "[i]t's when the dollar hits big numbers that gold gets punished and this is clearly one of those moments. There is a lot to be concerned about on the political and economic front (but) people tend to get inured to the idea of bad news and it doesn't affect them anymore."

That's not great news for gold bugs, and unfortunately, according to Jeffrey Currie, head of commodities research at Goldman Sachs (NYSE:GS), the situation is unlikely to change any time soon — speaking to CNBC, he said he sees the precious metal sinking 17 percent from its current price by the end of 2014.

"Our target at the end of this year is $1,050, really driven by the view that we think that the Fed will ultimately be the dominate force here and put more downward pressure [on prices]," he said, adding that he recommends shorting gold, which is currently sitting at $1,260.90.

That's one option, but as savvy investors are no doubt aware, it's not the only way to respond to gold's poor price prospects. Another, as a recent Financial Post article outlines, is to turn to gold mining stocks, some of which continue to "offer attractive value even at current prices."