Despite the recent pullbacks in the gold price over the past month, one well respected analyst and investor stated in an interview on Oct. 19 that gold will not only go much higher during the next financial crisis that is inevitable because of negative interest rates and geo-political uncertainty, but that it is the most stable 'currency' to have your wealth stored as in what is to come.
Raoul Pal is a former Goldman Sachs analyst and trader who now owns a proprietary company called Global Macro Investor. And while admitting he is and has never been a gold bug, he and many of his investment peers are all recommending gold as a necessity in the world's current and fragile monetary environment.
Mirror, mirror on the wall, which asset is most mispriced of all? According to a Goldman Sachs alum who predicted the financial crisis in 2008, it’s gold.
The precious metal should be a lot more expensive when the likelihood of a global financial collapse and a move toward negative interest rates is accounted for, says Global Macro Investor founder Raoul Pal, who now sees a U.S. recession within 12 months.
Uncertainty about Brexit and the timing of a Federal Reserve rate hike triggered a rush into the dollar, which often moves inversely to the metal. (Higher rates can work against gold, but the metal becomes a safe haven if the economy slows.)
“As we get to negative interest rates, gold is a good place to park your cash,” said Pal, who discussed his outlook with MarketWatch in a September interview and a follow-up conversation over email.
“I’m not a gold bug,” the former GLG Global Macro Fund co-manager — who is also watching the dollar closely — “but this is the currency I would choose now.”
Pal, an economist and strategist, also co-founded Real Vision TV, which conducts interviews with prominent investors. Many of his recent guests share his enthusiasm for gold, according to Pal.
“All the really serious thinkers are interested in gold,” he said. - Marketwatch