Gerald Celente, Director at TrendsResearch.com and one of the top trend forecasters in the world, has been getting ultra-aggressive in his call that gold is now in the midst of a bottoming process. With commercial hedgers showing renewed interest in gold, Mr. Celente’s long-standing bullish call on gold seems to be panning out in his favor.
Mr. Celente recently stated that he had been calling for gold to bottom at $1,200 per ounce since it started declining, and thus far it has touched $1,185 and stabilized in that area. He also reiterated the observation that big institutions are, indeed, getting back into gold – a sign that the “smart money” is finally net long gold again.
Gerald Celente believes in gold not only as a long-term moneymaker, but as a hedge in a shaky stock market. He’s not alone in this assessment: Ray Dalio, the biggest hedge fund manager on the planet, has been warning equities investors that the next bear market could be very painful: “The world, by and large, is leveraged long. I don’t think there’s much to protect investors when there is a downturn.”
Courtesy: Gerald Celente, Twitter
And with gold being the ultimate safe-haven asset, Mr. Celente is warning investors to listen to what the big institutional traders are saying. If anything can protect investors when there’s a downturn in the major indexes, according to Gerald Celente, it’s gold.
You know it’s a desperate situation when the mainstream press starts to pick up on the equities markets’ problems: The Wall Street Journal declaring “Global Economy Worsens” and The Financial Times announcing “Germany’s Contracting Economy Sets Puzzle for ECB Policymakers” are signs that all is not well with the current financial regime.
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Even Christine Lagarde, the Managing Director of the International Monetary Fund, was heard saying that market excesses are “approaching a threatening level” as the IMF issued a stark warning on leveraged loans. Meanwhile, market seer Paul Tudor Jones is cautioning investors that we’re probably in a “global debt bubble” and are headed for some “scary moments.”
With the U.S. debt approaching $22 trillion and the debt-to-GDP ratio at nosebleed levels, it’s not hard to build a case in favor of a precious metals allocation right now:
U.S. Debt-to-GDP Ratio. Courtesy: macrotrends.net
Hedge funds are well aware of all this, and it’s easy to see why they’re going long in the precious metals futures markets in this environment. Their fear isn’t your run-of-the-mill hedging strategy; it’s a rational concern based on real numbers. As usual, the institutions are seeing now what most retail investors will only come to appreciate later on, when it’s too late to take any meaningful action.
Combine this with the specter of rising Treasury interest rates looming, along with ongoing tensions between the U.S. and China over trade policies, and Gerald Celente’s bullish call on gold really starts to hit home. And while I can’t guarantee that gold is bottoming at around $1,200, I can tell you that if the markets head further south, you’ll be glad that you took a position in gold sooner rather than later.
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