Advertisement

Jeffrey Gundlach: gold to explode

No need to predict the rising price of gold – the market will prove it soon enough.

The "explosive, potential energy" of a huge "head-and-shoulders bottom" base is signalling a $1,000 move higher in gold prices, Jeffrey Gundlach,the founder of DoubleLine Capital, said last week at a New York event, reports Reuters. "Gold is maintaining an upward pattern above its rising 200-day moving average, which is extremely good," he said, referring to patterns that analysts see as bullish. "I'm not predicting it I'm letting the market prove itself."

Advertisement - Article continues below

The "Bond King" also argued that US Treasuries were "not attractive" despite rising yields, as various economic indicators suggest that US inflation is set to rise, which would hurt prices of government bonds (thus driving yields higher).

Meanwhile, the Federal Reserve, under new chairman Jerome Powell, will be less sensitive to panicky stockmarket movements, Gundlach said. "The Fed is not going to bail out the market unless there is a big problem." Concerns over privacy have led to more talk of regulating social-media companies, which could burst the bubble in US stocks (see main story), Gundlach believes. But he is bullish on commodities in general.

He reckons the SPDR S&P Oil & Gas Exploration and Production exchange-traded fund (ETF) in particular is worth a look it has not yet received the full benefit of the crude-oil rally, he told CNBC. "If you look historically at the energy sector versus the S&P 500, not surprisingly it's correlated with movements in oil. That hasn't happened this time, and I think there's a catch-up there."

Advertisement
Advertisement

Recommended

Commodities look cheap
Commodities

Commodities look cheap

Gold may be on a bull run, but industrial commodities, including copper, zinc and aluminium, remain cheap.
17 Jan 2020
Don’t panic about Iran – but don’t sell your gold either
Gold

Don’t panic about Iran – but don’t sell your gold either

Markets have reacted calmly to the tension between the US and Iran. But don’t get too complacent. It’s still a good idea to hold on to some gold as in…
9 Jan 2020
Here’s how gold could rise above $7,000 an ounce
Commodities

Here’s how gold could rise above $7,000 an ounce

That the gold price could hit $7,000 an ounce is a logical and plausible possibility, says Charlie Morris. Here, he explains how it could get there.
30 Dec 2019
Gold is in a bull market – and it could have much further to go
Commodities

Gold is in a bull market – and it could have much further to go

Many investors forget that gold is still the best-performing asset of this century, says Charlie Morris. It could also have much further to go.
27 Dec 2019

Most Popular

BP has slashed its dividend – and markets love it
Income investing

BP has slashed its dividend – and markets love it

BP has bowed to the inevitable and cut its dividend in half – and its share price promptly rose. John Stepek explains what it means for shareholders …
4 Aug 2020
Listed companies are dying out, and that could have serious consequences
Stockmarkets

Listed companies are dying out, and that could have serious consequences

Private equity is taking over from public stockmarkets as the biggest provider of capital to companies. That’s bad for investors and bad for society a…
3 Aug 2020
Gold hits the big $2,000 level – are Aim miners about to play catch up?
Gold

Gold hits the big $2,000 level – are Aim miners about to play catch up?

With the price of gold shooting through $2,000 an ounce, the yellow metal looks unstoppable. Things are so bullish, even Aim-listed junior gold miners…
5 Aug 2020