Gold And Silver Are Just Getting Started
“Cash is trash,” Ray Dalio, founder of Bridgewater Associates, the world’s largest hedge fund firm, said back in January. “There’s still a lot of money in cash.”
Instead, Dalio advocates for a highly-diversified portfolio, one that includes gold and other hard assets that we can’t just print more of.
“I believe that it would be both risk-reducing and return-enhancing to consider adding gold to one’s portfolio,” Dalio wrote last July in an article posted on LinkedIn. That same month, he revealed that gold would be among his top investments at Bridgewater.
It was a masterful call. Since he wrote the article, spot gold has climbed 35 percent. On Friday, for the first time since 2011, the precious metal crossed above $1,900 an ounce. And today, it hit a new all-time record high, trading above $1,940 for the first time ever.
Dalio isn’t the only big-name investor and money manager who’s recently thrown his weight behind gold. Speaking to Bloomberg TV on Friday, emerging markets investor Mark Mobius urged viewers to buy gold now and “continue to buy” as interest rates remain near zero and as COVID-19 continues to impact mine output.
Gold price makes history, hits all-time high and analysts still looking for more
The dollar has become the world’s punching bag and it’s likely to stay that way for awhile.
The world’s reserve currency benefited in a big way from a flight-to-safety, which drove it to a three-and-a-half year high in March as the coronavirus pandemic spread to the U.S. Now, as the world’s focus has shifted back to fundamentals, the dollar has rapidly slumped to a two-year low.
Strategists say the dollar’s slide comes as the U.S. lags most of the world in halting the spread of the coronavirus, and some expect the U.S. economic recovery to lag others, including Europe. The dollar is also reacting to the prospect of mounting U.S. deficits and ultra-low U.S. interest rates well into the future.
“The move against the dollar is now broadening, not only more countries, like emerging markets currencies, but also more participants,” said Marc Chandler, chief market strategist at Bannockburn Global Forex. “Asset managers, speculators and the other big group, judging from the skew in the options markets, is the hedge funds, joining the dollar bearish party.”
Can record gold price continue to $4,000 and beyond? What history tells us
Gold set a new record over the weekend as prices surpassed $1,920 an ounce, the previous all-time high set in 2011, but momentum may not stop until $4,000 an ounce is taken out, according to Frank Holmes, CEO of U.S. Global Investors, who based his prediction on the effects that monetary stimulus had on gold during the last recession.
It’s important to take Holmes’ forecast into context.
Although gold has already breached all-time highs in several foreign currencies, this is the first time since 2011 that the yellow metal has seen new highs in U.S. dollar terms.
“In the next three years, if we look back, if [history] repeats itself, from 2008, 2009 to 2011, that three year run saw gold go from a $750 – $800 range up to $1,900. If we forecast that because we have the same expansion of the balance sheet of the Fed then it would project, if cycles are exactly the same, gold could go to $4,000,” Holmes said in an interview.
Holmes is not alone in his long-term bullish forecast. Dan Oliver, founder of Myrmikan Capital, sees prices headed to $10,000 an ounce.
Yahoo Finance/Bloomberg/Justina Vasquez and Yvonne Yue Li
U.S. Mint Has Reduced Silver, Gold Coin Supplies to Purchasers
The U.S. Mint has reduced the volume of gold and silver coins it’s distributing to authorized purchasers as the coronavirus pandemic slows production, a document seen by Bloomberg shows.
The Mint’s West Point complex in New York is taking measures to prevent the virus from spreading among its employees, and that will probably slow coin production there for the next 12 to 18 months, the document shows. The facility is no longer able to produce gold and silver coins at the same time, forcing it to choose one metal over the other, according to the document, which was presented to companies authorized to buy coins from the Mint last week.
A spokesman for the Mint didn’t immediately have comment.
“The pandemic created a whole new set of challenges for us to manage,” the Mint said in the document. “We believe that this environment is going to continue to lead to some degree of reduced capacity as West Point struggles to balance employee safety against market demand.”