Gundlach on Gold

After the Fed cut the fed funds rate by a quarter point, Double Line Capital’s CEO “Bond King” Jeffrey Gundlach told CNBC, “I still think a 25% type weighting in gold is not excessive. I think that is an insurance policy. It’s in a winning mode because of the weaker dollar and I believe that’s going to continue,” he said.

Natural resource guru Rick Rule often points out the average investor has only .05% of their assets in gold with the historical average being 2%. 

According to StockAnalysis.com “The Gold industry has a total of 51 stocks, with a combined market cap of $533.24 billion, total revenue of $95.19 billion and a weighted average PE ratio of 24.37.”  The number 51 seems too light, but you get the point, NVIDIA’s market cap is over $4 trillion. Add the market caps of just Alphabet and Microsoft to NVIDIA and the total is over $10 trillion, 20 times the market of all major mining companies. These days Bitcoin is considered gold 2.0 and Dan Ives, the guy who wears colorful sports jackets, calls NVIDIA chips the new gold.

The yellow metal remains lonely and ignored. 

“I think almost certainly gold will close above $4,000 before the end of this year,” Gundlach said on CNBC’s “Closing Bell.” His forecast represents a 7% upside from the current record level.