Jeffrey Gundlach believes it’s a good time to buy gold instead of bitcoin after gold crosses the $1,800 per ounce level.
Buys from this instead of bitcoin
Gundlach said on Tuesday’s ‘Just Markets’ webcast that gold performed well on a non-dollar basis last year, but has recently started to perform in US dollars as well. Gundlach said, ‘There hasn’t been much movement under it for the last two and a half years, other than horizontal movements. In other currencies, gold performed quite well. Now with the dollar weakening, gold is back and above its 200-day moving average,’ he said.
Gold is one of Gundlach’s recommendations for assets to own in 2023. In their description, ‘This is a pretty good time to buy and own gold. One of my recommendations to have was gold, which I rallied at around $1,800. “We’re not far beyond that right now,” he said.
February Comex gold futures were last trading at $1,873.60, down 0.15% on the day. According to Gundlach, who doesn’t see the US dollar index return to 115, gold’s decline this year will help lower the US dollar, which has already peaked in 2022. cryptocoin.com As we mentioned, the index was 103.30 instantly.
Macro outlook, inflation, Fed and recession
Billionaire ‘Bond King’ Gundlach told market watchers that, from a macro perspective, the yield curve was ‘screaming recession’ due to the Federal Reserve’s more aggressive steps in the second half of the year. This is just one of many indicators pointing to an impending recession in 2023.
Other indicators pointing to the impending recession include the dramatic decline in the consumer savings rate, consumers’ shifts to credit cards, the Leading Economic Index (LEI) released by the Conference, and the latest ISM PMI data. Gundlach said he didn’t rule out negative inflation as the CPI fell this year. He compared the movement of the inflatable to a swinging pendulum.
‘It is absurd to believe that the inflation rate will drop from 9.1% to 2% and then magically stop there. When you have a pendulum it’s almost like a law of physics. When it gets to the extreme and starts going backwards through the arc, Otherwise, it doesn’t stop in the middle. It’s crossing the middle,’ Gundlach explained.
Price pressure may drop
If the Fed manages to push inflation back to 2%, price pressure will fall even more. “If it reaches 2% during 2023, I think inflation will probably go negative year over year,” Gundlach said.
In 2023, the CEO of DoubleLine Capital sees many opportunities in bonds, with the bond market now looking much cheaper than the stock market. ‘The bond market is blatantly cheap for the stock market and I’m not a 60-40 portfolio but more like a 40-60 portfolio, even a 40-25-15 portfolio with bonds, stocks and stuff I recommend.’ said. Then ‘Bond allocation will be much more rewarding this year.’ he added.
Noting what the bond market points to, Gundlach added that the Fed will have problems with rates up to 5 percent and will have to cut interest rates this year. ‘Bond market pricing suggests the Fed won’t go up to 5 percent. By May or June they will raise it to just under 5 percent and then start the discount. Also, by the end of 2023, the Fed funds rate is predicted by the Bond market to be lower than it is today.”
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