Barron's Live All That Glitters: The Outlook for Gold
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Apr 21, 2025 In this discussion, John Hathaway, a Senior Portfolio Manager at Sprott Asset Management USA and a precious metals expert, shares insights on the recent surge in gold prices. He explores China's strategic gold purchases influenced by cultural factors and skepticism towards banks. Hathaway highlights the undervaluation of gold mining stocks and the dynamics of silver and other precious metals. He provides strategies for retail investors and emphasizes the increasing appeal of gold amidst economic uncertainties and declining trust in traditional assets.
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Gold Rally Drivers
- The gold rally began years ago due to geopolitical shifts and the weaponization of the U.S. dollar.
- Chinese public and central banks significantly increased their gold investment recently, while U.S. investors largely stayed out until now.
Timing Gold Investments
- Avoid chasing the gold rally while it's rapidly increasing in price.
- Wait for a market correction or pullback to enter the gold market more safely.
Gold as a Safe Haven
- Gold is considered a safe haven asset, historically alongside U.S. Treasuries.
- However, chasing gold in a skyrocketing market may not be a safe haven in the short term.