Ric Deverell is convinced the sell-off in gold is far from over.
On Thursday, Deverell — Credit Suisse’s Global Head of Commodities — told reporters in London that the yellow metal was heading to $1,100 this year and to $1.000 within five years.
He made those comments during Credit Suisse’s 5th annual commodities day in London.
He also circulated a 41-slide presentation on commodities titled “The Setting Of The Sun.” It included 5 slides dedicated to his bleak outlook for gold.
“Gold has been the only trending asset for the past 10 years, but the trend has broken,” wrote Deverall noting that the recent sell-off has been a highly unusual 3 standard deviation event.
“Despite recent falls the price still appears excessive,” he added noting that gold continues to be priced well above its long run average.
Even relative to other metals, gold appears to be significantly overvalued.
However, it was this last slide that was arguably the most important (and most hilarious).
You see, gold bugs have argued that the global debt crisis would continue to flair up and central bank monetary policy would cause inflation to run rampant.
But both of those concerns have receded.
Deverell uses the analogy “Planet of The Apes Risk” to illustrate the risk of financial and societal meltdown. This is something that could happen in Europe if the euro broke up.
For now, the euro is holding together. And humans have not been displaced by apes.
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