\u2018Every reason is out there for gold not to be doing great. The economy is very slow, real rates are acting in a way that would normally predict for gold to be struggling, the yield curve is no longer inverting \u2026 there\u2019s a lot of heavy things happening, and you would think gold would be weak during that time,\u2019 he noted. \u2018But it\u2019s very strong, and I think we\u2019re going to move up to that US$2,150 to US$2,200 (per ounce) trading level by the middle of the year.\u2019 <\/p>\n
Back in October, Tucker said he was anticipating a major reality check in the spring of this year, and he still sees that coming. Explaining why, he said watching interest rates is less important than people may think.<\/p>\n
\u2018Does the rate really matter, is that really what\u2019s going on here? What they\u2019ve been doing is draining the system of liquidity \u2014 that\u2019s what they\u2019ve been doing. They use that rate to corral all that money that they\u2019ve printed,\u2019 he said. <\/p>\n
\u2018And you see it in the reverse repo market \u2014 they\u2019ve been pulling that out, it\u2019s down to US$600 billion. It started at US$2.2 trillion \u2026 the balance sheet got to US$9 trillion, it\u2019s US$7.5 trillion now, so it\u2019s exactly the same number \u2014 that\u2019s what\u2019s happening, they\u2019re going to pull it out. When are they going to do it? It\u2019s very easy, it\u2019s US$90 billion per month. So by the summer it\u2019ll be out,\u2019 he continued, adding that the system will start to rattle at that point. <\/p>\n
\u2018This rattling is a problem because the system in the US is totally dependent on more money flowing in. And money is going out right now, US$90 billion a month out. And what I\u2019m saying is that when you hit that floor \u2026 I bet you the (US Federal Reserve\u2019s) balance sheet gets to US$7 trillion and there\u2019s a turn. I bet you that\u2019s their target. It went to US$9 (trillion) after the pandemic, and I bet you it goes back to US$7 trillion before it goes again,\u2019 he commented. <\/p>\n
In terms of what investors can do in these circumstances, Tucker said it\u2019s important to be cautious. <\/p>\n
\u2018I think people need to try to play the short term carefully, but also be playing the long term. You want to buy things that are going to go up,\u2019 he said, noting that the gold market is currently smaller than it was 25 years ago. \u2018Hershey (NYSE:HSY) is the size of Newmont (TSX:NGT,NYSE:NEM). I mean, think about that. It\u2019s like a candy bar vs. a gold bar. Hershey and Newmont \u2014 which one would you rather have?\u2019<\/p>\n
Securities Disclosure: I, Charlotte McLeod, hold no direct investment interest in any company mentioned in this article.<\/strong><\/p>\n<\/p>\n \u2018Every reason is out there for gold not to be doing great. The economy is very slow, real rates are acting in a way that would normally predict for gold to be struggling, the yield curve is no longer inverting \u2026 there\u2019s a lot of heavy things happening, and you would think gold would be […]<\/p>\n","protected":false},"author":0,"featured_media":652,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3],"tags":[],"class_list":["post-651","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-investing"],"_links":{"self":[{"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/posts\/651","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/comments?post=651"}],"version-history":[{"count":0,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/posts\/651\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/media\/652"}],"wp:attachment":[{"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/media?parent=651"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/categories?post=651"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/tags?post=651"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}