Hedge fund veteran's belief in gold unshaken

Large fund managers like Paul Johnson and Eric Sprott long on gold suffered huge losses in 2013 as the price of the metal slumped 28%.

Paul Singer, boss of 37-year old investment firm Elliott Management, also took a bath on the fund's gold holdings last year, but it has not shaken legendary investors faith in the metal.

USA Today report Singer in a letter to investors debunked the idea of Bitcoin as an alternative currency or storer of wealth adding that gold will be back in favour soon:

"We think that gold is a unique investment asset, the only real money that has stood the test of time throughout recorded history," Singer wrote. "With its durability, finite and difficult-to-extract supply and natural allure, it is a store of value that should be particularly attractive at a time when monetary debasement is the major policy practiced by most developed countries to keep their economies afloat."

"If the global economy recovers strongly without a significant uptick in inflation, then gold might continue to be a neglected asset class. But low growth and high inflation are typical hallmarks of structurally unsound economies experiencing monetary debasement, so perhaps that phase is next, or soon to appear," Singer said. "We shall see."

Singer's flagship Elliott Associates fund gained 12.4% after management fees last year and boasts one of the best records in the investment industry with annualized returns of 14% since inception in 1977.