Gold was considered a "barbaric relic" by John Maynard Keynes and thought only fit to pave the floors of capitalist latrines by Vladimir Ilyich Lenin. Yet gold has changed the fate of nations and dynasties for millennia from the Roman Empire's lust for Cleopatra's gold to the Spanish conquistadore's dreams of El Dorado. The gold mines of the Witwatersrand shaped the birth of modern South Africa and even the Soviet Union used Swiss private banks in Zurich to sell its bullion to the Western goldbugs. The gold standard was the linchpin of the international monetary system until the Great Depression and the US dollar was pegged to gold in the postwar Bretton Woods exchange rate regime.

Hong Kong's multi billion dollar trading fortunes were founded on bullion smuggled out of the Mainland by Shanghai and Guangzhou merchants as Mao's Peoples Liberation Army won the Chinese civil war. Dubai emerged as the Middle East's "city of gold" in the 1970s after Beirut's devastation in the Lebanese civil war the Iranian revolution and the Soviet invasion of Afghanistan even though there is no gold mine in 5000 miles. Indian brides have venerated gold since Vedic times and the gold souqs of Jeddah predate Ottoman rule in the Hijaz.

Unfortunately gold has been a disastrous investment since it peaked at $1930 an ounce in September 2011 losing 40 per cent until early January 2016. However the crash in global banking shares since the new year have led to a 18 per cent rally in gold making the yellow metal a winner asset class for 2016 to date. However I am convinced that the macroeconomic logic for a gold rally does not exist and the SPDR Gold Shares (GLD) should be shorted above $1250 spot.

One we are witnessing a "growth scare" but not a real global recession since the US consumer (70 per cent of US GDP) remains in great shape and the collapse in oil prices is a $3 trillion wealth transfer from oil exporters to energy importers. The US banking system is the safest best capitalised in the Western world and the US dollar will rise against the yen euro Chinese yuan commodity and emerging market currencies. All these macro trends mean the 2016 rally in gold will abort and prices will fall at least 20 per cent lower in the next twelve months.

Two three trillion dollar collapse in oil and commodities has devastated the public finances of countries like Russia Saudi Arabia Nigeria Iran Venezuela South Africa Malaysia Iraq and Brazil. The central banks and sovereign wealth funds of these states will be major sellers of gold in 2017. Prices above $1250 an ounce will tempt Third World central bank to raise cash to plug budget deficits caused by the oil/metals crash.

Three Japan Germany Switzerland Benelux Sweden and Denmark offer negative interest rates on bank deposits and money markets. This only happens when the world is on the precipice of deflation not inflation. Gold falls in times of deflation the worst possible macro scenario for hard assets like property and precious metals. A stronger US dollar emerging market central bank selling Federal Reserve rate hikes and a resilient US consumer economy all means Chicken Little fears on global banks (No Deutsche Bank and Credit Suisse are not the next Lehman!) will dissipate and the Big Grizzly will continue to maul gold.

Four high real (inflation adjusted) interest rates are to gold what a cross in sunlight is to Count Dracula. As the Federal Reserve raises interest rates as the US economy returns to trend growth gold will resume its bearish downtrend. Geopolitical trauma like the Arab Spring the war in Ukraine or North Korea's hydrogen bomb test did nothing to ignite a gold bear market. When real interest rates rise a zero income asset like gold can only be sold.

Five China has emerged as the world's leading buyer of bullion. Yet Chinese growth has plummeted to 25 year lows and Chinese state reserves have fallen by $800 billion. Global equities have erased $7.8 trillion in the crash of 2016. Shanghai and Shenzhen shares are down 40 per cent from summer highs. The Middle Kingdom will be a seller not buyer of bullion in 2016 and the plunge in the Indian rupee is not positive for bullion demand in India. Gold's charts confirm Ursa Maxima too. Any mini-breakout above $1240 an ounce is an ideal level to short the world's biggest gold index fund the SPDR Gold Shares (symbol GLD) for a $950 an ounce target.

Researched and compiled by Matein Khalid. Mr Khalid is a global equities strategist and fund manager. He can be contacted at: