Renowned “big macro-events” investors Danny Moses, Vincent Daniel, and Porter Collins, famous for predicting the 2008 housing crisis, are now bullish on gold. This was discovered during a CNBC interview where Collins emphasized, “I just don’t think Americans have enough gold in their portfolio.” They cite key drivers like the pace of central banks buying gold and the U.S. budget deficit as key reasons for their confidence level.
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Their firm, Seawolf Capital, holds strong positions in gold (XAUUSD), gold miners, Silver, Platinum, and Bitcoin (BTCUSD). Danny Moses also revealed a substantial long position in the Sprott Physical Gold Trust (PHYS), which is up by more than 16% this year.
Why Investors Hold Gold
Gold has long been viewed as a safe haven due to its stability and intrinsic value. The classic reasons are its portable, divisible, fungible, and stable characteristics, which are viewed as necessary characteristics of a lasting currency. Year-to-date, gold prices have surged, driven by geopolitical uncertainty and an unusually large amount of central bank buying.
Analysts predict gold, currently at $2,600 an ounce, could reach $3,000 an ounce within 18 months. The bullishness from firms like UBS (UBS) and Berenberg is largely attributable to gold’s role as a hedge against geopolitical upheaval and inflation. Metals consultant Robin Bhar advises holding gold for long-term investment due to its potential in volatile markets.
How to Invest in Gold
Investors can gain exposure to gold through physical gold, gold-related stocks, gold mining stocks, and ETFs. Physical gold, such as coins or bars, provides the comfort of a tangible asset but comes with storage and less appealing tax implications. Gold ETFs, like SPDR Gold Shares (GLD) and iShares Gold Trust (IAU), provide a convenient way to invest without physical storage.
Colin Hamilton from BMO Capital Markets, a division of the Bank of Montreal (BMO), explains, “You own the physical material, but you don’t have it in your hand.” Gold mining ETFs, such as the VanEck Gold Miners ETF (GDX), offer exposure to multiple mining companies. The largest gold mining operations for mining stocks are Barrick Gold (GOLD) and Newmont Mining (NEM); both companies also mine other precious and semi-precious metals.
Key Takeaways
Successful investors, including Danny Moses, Vincent Daniel, and Porter Collins, advocate for a gold allocation in portfolios, pointing to economic uncertainties, central bank purchases, and inflation concerns. Gold has historically been a safe haven in troubled times, and its value is predicted to rise significantly. Investors can gain exposure to gold through physical assets, funds or ETFs, and mining stocks. Each has its own advantages and considerations. If geopolitical and economic tensions escalate, maintaining an allocation in gold may provide stability and potential returns.
