Peter Thiel, a Pay-Pal co-founder, is not a fan of investing in gold.
Thiel is not about to jump on the bandwagon to invest in gold, according to an interview with Big Think.
He advises investors to “think of gold as not a protection against inflation, but as an anti-investment. You invest in gold when there's nothing good to invest in.”
Thiel is currently the president of the Clarium Capital Management, a hedge fund with more than $2 billion under management, which is generating a loss of 16.4% in 2009 so far.
Silicon Alley Insider reported that Thiel’s November 13-F filing states that he maintains a small stake in SPDR gold trust. Thiel has larger investments in Nike, Toyota and other commodities.
"If you believe in inflation, you should probably be investing in land in India, or some sort of inflationary asset that does really well if you have crazy runaway inflation," he says.
"But if you believe that it's going to be very hard to make good returns on investments, and that could [either] be an inflationary environment or it can be a deflationary environment, then gold becomes relatively attractive” he said.
Thiel, who is a managing partner in The Founders Fund, a venture capital fund, also said he underestimated how “fragile” the markets were before the recession.
“The gold market continues to take the lead from action in the currency markets,” said Toby Hassall, an analyst with CWA Global Markets Pty Ltd.
“The dollar fell back as equities gained into the close on Wall Street. That’s providing some support to gold in trade today.”
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