Gundlach Reiterates $1400 Gold Target
Tommy Humphreys | May 06, 2015 12:19AM ET
Famed bond fund manager Jeffrey Gundlach gave a presentation at the New York Yacht Club yesterday in which he reiterated a $1,400 target for gold by year end. From what I gather, Gundlach has two primary tenets to his bullish gold thesis:
- Negative interest rates in Europe will make gold very attractive relative to holding negative yielding cash or extremely low yielding sovereign debt
- Fears of Fed rate hikes have been weighing on gold for some time and these fears are overblown because the US economy isn’t yet strong enough for the Fed to embark upon a protracted rate-hike cycle
One slide in particular caught our eye as being especially noteworthy:
Including central bank purchases both the euro area and Japan are shrinking the amount of sovereign debt in the market. This is quite significant and helps to explain why eurozone sovereign yields are at historically low levels. Gundlach is right, gold looks very attractive compared to holding euro cash or euro denominated sovereign debt. I wonder when the market is going to catch on….
Original post
Get The News You Want
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.