Macro investor Luke Gromen says one asset class will continue outperforming tech stocks regardless of how the AI boom ultimately plays out.
In a new episode of the Forest For the Trees podcast, Gromen says gold and metals are the early winners in the AI race, with application software appearing to have gotten the short end of the stick.
According to Gromen, an AI bubble would eventually trigger new demand for gold after it bursts, as investors seek shelter from the aftermath. If there’s no AI bubble, Gromen says metals like copper and silver will continue to witness sustained demand from tech firms.
“Well, if it’s a bubble, bad for tech, okay. If it’s not a bubble, then software as a service and some of the tech high flyers, they might see some competition, particularly in software, as you noted. Maybe even just on pricing pressure. If it is a bubble, then I think it’s gonna be good for gold if/when it bursts.
If it’s not a bubble, then I think it’s good for raw materials and inflation because we’re increasingly seeing copper and aluminum and labor, et cetera, are the bottlenecks.”
Gromen also says that his investment thesis has been playing out for about a year now.
“And so I think it’s going to persist for the next couple of quarters, barring some sort of drastic event that shakes everything up. This sort of shift to the metals and the gold and precious metals away from tech. And like I said before, Nasdaq’s down 45% in gold terms since early 2024.”
He adds that gold has another catalyst that could send prices soaring.
“And I think it’s gonna continue ongoing, particularly relative to gold, given what’s been happening geopolitically.”
At time of publishing, gold is trading at $4,821 while silver is valued at $83.11.
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