Now is the time to buy gold and position your portfolio for success as the risk of a recession and major fiscal crisis looms large, one gold industry expert has urged this week.
Fund manager Ronald-Peter Stöferle says the temporary lull in price action, fuelled by rising bond yields and a renewed expectation of an aggressive rate hike, means that this is a highly favourable period to acquire gold and set up a strategic position ahead of expected record price highs later in the year.
Markets expect that the Federal Reserve will commit to a 50-base points rate hike in March, as jobs data continues to surprise to the upside. This means that the bond yields are currently performing well, with the shorter curve yield rising. However, this masks trouble down the road, with Stöferle expecting a recession to arrive imminently. This would push the Federal Reserve to reverse course. He commented, “In the 2022 In Gold We Trust [report], we said that central bankers are doves in hawkish clothing and nothing we have seen has changed this view. As soon as credit markets tighten, there’s no way the Fed or any central banker will stay hawkish.”
Calling for an imminent economic slowdown, he said that warning signs are already emerging. “It’s like being in a room that is losing oxygen,” he said. “At first, you might not notice anything, but then it gets harder to breathe. Soon, you are rushing to the exits, hoping to get out before it’s too late. Not only is the risk of a recession rising, but I think we could see a major fiscal crisis.”
With gold prices holding steady right now around £1,522 ($1,840) there is a clear opportunity to buy at a favourable level before the rush towards £1,655 ($2,000) begins in earnest. Be strategic. Buy now.
