“Bond King” Jeffrey Gundlach says gold’s surge has run too far too fast, and that investors who missed the rally should wait for a significantly cheaper entry point before adding exposure.
In a new CNBC interview, Gundlach says investors should be cautious on gold in the short term, believing that the precious metal will likely witness another leg down before it can restart its uptrend.
“I’m not really that fond of gold in the near term. It peaked out at about $5,500. And after the vertical rise up from $3,500, I wouldn’t be surprised if gold went below $4,000 before resuming its rise higher.”
Despite the near-term caution, Gundlach says he is not abandoning gold entirely. He says investors should be patient and wait for the correction to play out before rebuilding positions.
“I had been recommending that investors own a commodity index, like the Bloomberg Commodity Index type of thing, and also a little dollop of gold directly in there. You could have an overweight to gold – I don’t recommend that right now. I think there’s going to be a cheaper entry point.”
For investors looking for commodity exposure in the meantime, Gundlach says the broader commodity complex is the more attractive near-term play, noting that the energy sector has been the primary driver of its strength since the war began.
“Commodities broadly certainly seem strong. Obviously, that’s been powered by the energy sector since the war started.”
Gold (XAU) is trading at $4,546 at time of publishing, down over 18% from its all-time high of $5,602.
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