Peter Cooper predicts the price of gold will more than quadruple in coming years.
Gold could yet shine brighter
As the price of gold reached an all-time high yesterday, few people were as pleased as the Dubai-based writer and investor Peter Cooper. In March, Mr Cooper published Dubai Sabbatical: The Road to $5,000 Gold in which he predicted the price of gold would more than quadruple in coming years. Some people felt his argument was unrealistic - at least until gold started to hit new heights. It closed at US$1,244 an ounce yesterday.
"Sometimes you are lucky in these things," he said. "It seems to be getting exciting." Mr Cooper's book is a memoir of sorts in which he relates how he and his wife travelled the world after he sold his Dubai-based company AME Info for $27 million (Dh99.1m) in July 2006. He pocketed a modest share of that amount and resolved to spend some of it searching for the next place to settle. Everywhere he went - from the UK to Russia to South Africa - he saw consumers and governments spending money hand over fist.
"You would expect after selling the company that we would feel a bit wealthy but we didn't really. We could barely keep up," he said. Mr Cooper ended up coming back to Dubai and sinking about a quarter of his investible assets into gold. While he concedes that $5,000 an ounce is likely to be years away at the earliest, he thinks governments will soon be forced to raise interest rates from their current low levels. "That hits real estate, equities, bonds - what's left? It's precious metals," he said.
He attributed the rise in recent days to unease among investors that "something nasty is out there", a reference to fears about a European debt contagion and the still unexplained tumble in the US stock market last week. Here in the Gulf, investors have always had a fondness for gold and Mr Cooper said there were whispers that some of the region's wealthiest families had been making large purchases. He noted that the price of gold was historically linked to the price of oil, as both were dollar-denominated commodities. If gold does continue to climb, that could be a boon for local economies.
"You could see an oil price boom as well, which would be great for us - and terrible for the rest of the world." @Email:email@example.com