Business icons Warren Buffett and Bill Gates say they don't really like gold as an investment. They're wrong, says Michael Pento, founder of Pento Portfolio Strategies in Holmdel, N.J., adding he'd trade against the two titans any day.
"Absolutely I would take the other side of that trade," Pento tells CNBC.
"The stock market has gone nowhere in nominal terms in 12 years. It makes sense as a default under the current conditions of negative real interest rates to own something that keeps you afloat, that preserves your purchasing power."
Gold peaked above $1,920 an ounce in September 2011, mainly due to loose monetary policies that sent the yellow metal's traditional hedge, the dollar, tank.
However, investors are seeing the dollar in a new light, especially on sentiment that U.S. economy is strengthening while Europe is battling increasingly rough headwinds.
The rebounding dollar has helped send gold close to $1,600 an ounce.
Expect it to jump back and hit $1,900 later this year, Pento says, as interest rates will stay low and prevent the dollar from making more substantial long-term gains aside from short-term safety plays stemming from European volatility.
"I would ask Mr. Buffett if he could own a lone share of a representative of the S&P 500, or would he rather have the equivalent of an ounce of gold?" Pento says.
"Which investment has done better over the last dozen years? The answer is clear: Gold."
Others aren't intimidated by Buffett's reputation.
"His track record since 2008 has not been very good," says Kathy Boyle, president of Chapin Hill Advisors in New York, CNBC adds.
"He might be the Oracle of Omaha for the long-term, but short-term since 2008 his trades have not been that great."
Gold has taken hit on growing sentiment that despite weak employment numbers, the Federal Reserve remains unlikely to step in and stimulate the economy in a way that would encourage hiring and growth but weaken the dollar in the process.
Such monetary policies — bond buybacks from banks known technically as quantitative easing (QE) — send gold rising as a hedge against longer-term inflationary side effects.
"We really need to see economy much weaker before the central bank steps in," says Dominic Schnider, head of commodity research at UBS Wealth Management in Singapore, according to Reuters.
"For now the market is in risk aversion mode. With inflation threat out, oil prices coming off and QE hurdles really high in developed economies, gold is in a vulnerable position."
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