The World’s Largest Hedge Fund Says “Gold to Surge!”

16 Jan

The World’s Largest Hedge Fund Says “Gold to Surge!”

The co-chief investment officer of the world’s largest hedge fund says gold could gain 30 percent this year, as global political uncertainties increase.

That forecast would put gold at $2,000 per ounce.

Bridgewater Associates, located in Westport, Connecticut, manages $160 billion for its clients, some 350 of the world’s largest institutions.  Greg Jensen, the firm’s Co-Chief Investment Officer, told the Financial Times that investors should make gold a cornerstone of their portfolios, as “most of the world is long equity markets in pretty extreme situations.”

But Jensen’s recommendation is not just because of extreme stock valuations.  He cited growing income inequality in the US and rising tensions with China and Iran as some of the uncertainties that could prompt investors to look to so-called safe-haven assets.

Ray Dalio, Founder/CEO, Bridgewater Associates

“There is so much boiling conflict,” he said.

Jensen also said that the US dollar could lose its global reserve currency status.  That is an outcome we believe is inevitable (see here), one that will rock the American economy to its core, taking an enormous toll on the dollar.  “It’s definitely in the range of possibilities. And when you look at the geopolitical strife, how many foreign entities really want to hold dollars? And what are they going to hold? Gold stands out,” he said.  

Bridgewater founder and CEO Ray Dalio, cited many of these same factors last year as reasons to expect a major economic “paradigm shift.”  We reported on his observations in our post “Invest in Gold to Protect Yourself from Monetary Geniuses!”  last November.  That piece is worth reviewing 

“There will no longer be an attempt by any of the developed world’s major central banks to normalize interest rates,” Jensen said. That is a forecast for prolonged money-printing around the world.  

“People should be prepared for a much wider range of a potentially more volatile set of circumstances than we are mostly accustomed to,” said Jensen.