Greenlight's Einhorn sees gold going 'higher, perhaps much higher'
Reuters
Published Jun 09, 2022 03:02PM ET
Updated Jun 09, 2022 03:37PM ET
By Carolina Mandl
NEW YORK (Reuters) - Greenlight Capital hedge fund manager David Einhorn said on Thursday that the Federal Reserve is pretending it can tame inflation and that the price of gold is likely to go higher amid the current environment of rising prices.
"The question is whether there's enough gold to back the currency reserves. The answer is for the price of gold to go higher, perhaps much higher," Einhorn said, speaking at the Sohn Investment Conference, which is being held virtually. Einhorn has long been betting that gold is a critically important asset in portfolios.
Einhorn's fund is up 20.9% this year, thanks to investments in gold, macro trades, and bets that shares in some unnamed companies would fall.
The investor said the Fed's tools to control inflation are limited, mainly because of the U.S. deficit. When rates go up, the country's debt also increases.
"The Fed is bluffing," not fighting inflationhe said, saying it may choose to support the Treasury. "Just wait until they're forced to loosen into an inflationary spike to support the Treasury. At that point, it's best to have some gold. That's what grandpa Ben taught me."
He added that some countries may also decide to sell their reserves in dollars, after the U.S. froze Russian Central Bank reserves as a sanction earlier this year.
Get The News You Want
Written By: Reuters
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.