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Yahoo
10-05-2025
- Business
- Yahoo
Why Bond King Jeff Gundlach says record-setting gold is poised for another 20% rally
Gold prices could rally another 20% even after a recent string of records, Jeff Gundlach says. That's because investors are finally treating gold like a true asset class rather than a safe haven. The price of bullion is up 25% year-to-date. Gold's record-setting rally isn't close to being over, according to "Bond King" Jeff Gundlach. The DoubleLine Capital CEO predicted that the price of the precious metal could climb as high as $4,000 per ounce, a gain of 20% from Friday afternoon's price of around $3,345. Speaking to CNBC this week, Gundlach said tariff-related volatility is fundamentally changing the way traders view the precious metal, pointing to its 25% rally year-to-date. "I think that's telling us that we're in a regime where gold is no longer a speculation for short-term traders, or for survivalists as a long-term hold. I think people are viewing gold as an asset class out of fear of the turmoil that's going on geopolitically, with the tariffs and everything else, and just the amount of debt that exists, that people wonder how we're going to deal with this. So gold is sort of the true monetary asset," Gundlach said. The global market for physically-backed gold ETFs swelled by $11 billion in April to $397 billion, according to data from the World Gold Council. Meanwhile, 58% of global fund managers in a recent Bank of America survey said they believed gold was the safest asset in a full-blown trade war. Gundlach added that he believes the backdrop for other risk assets, like stocks, is challenging at the moment. He doubled down on his forecast that stocks could see a "breakdown" in the near term, potentially taking the S&P 500 as low as 4,500. That would imply a 20% drop from current levels. "I feel like we're in a risk-off market on an intermediate term basis," he said. Other forecasters have issued bullish calls on gold in recent months, citing uncertainty stemming from Trump's trade policy. Goldman Sachs lifted its price target for the precious metal last month to $3,700 an ounce, pointing to high levels of policy uncertainty and a potential slowing of the US economy. UBS and Bank of America have also issued $3,500 price targets on gold, implying 4% upside from current levels. Read the original article on Business Insider Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Business Insider
09-05-2025
- Business
- Business Insider
Why Bond King Jeff Gundlach says record-setting gold is poised for another 20% rally
Gold's record-setting rally isn't close to being over, according to "Bond King" Jeff Gundlach. The DoubleLine Capital CEO predicted that the price of the precious metal could climb as high as $4,000 per ounce, a gain of 20% from Friday afternoon's price of around $3,345. Speaking to CNBC this week, Gundlach said tariff-related volatility is fundamentally changing the way traders view the precious metal, pointing to its 25% rally year-to-date. "I think that's telling us that we're in a regime where gold is no longer a speculation for short-term traders, or for survivalists as a long-term hold. I think people are viewing gold as an asset class out of fear of the turmoil that's going on geopolitically, with the tariffs and everything else, and just the amount of debt that exists, that people wonder how we're going to deal with this. So gold is sort of the true monetary asset," Gundlach said. The global market for physically-backed gold ETFs swelled by $11 billion in April to $397 billion, according to data from the World Gold Council. Meanwhile, 58% of global fund managers in a recent Bank of America survey said they believed gold was the safest asset in a full-blown trade war. Gundlach added that he believes the backdrop for other risk assets, like stocks, is challenging at the moment. He doubled down on his forecast that stocks could see a "breakdown" in the near term, potentially taking the S&P 500 as low as 4,500. That would imply a 20% drop from current levels. "I feel like we're in a risk-off market on an intermediate term basis," he said. Other forecasters have issued bullish calls on gold in recent months, citing uncertainty stemming from Trump's trade policy. Goldman Sachs lifted its price target for the precious metal last month to $3,700 an ounce, pointing to high levels of policy uncertainty and a potential slowing of the US economy. UBS and Bank of America have also issued $3,500 price targets on gold, implying 4% upside from current levels.
Miami Herald
08-04-2025
- Business
- Miami Herald
There's likely some stress among bond traders
One of the little-discussed by-products of the massive financial market turmoil since the end of March is who the losers might be. Aside from investors, of course. Don't miss the move: Subscribe to TheStreet's free daily newsletter There will be some casualties among traders who are suddenly forced to sell securities to meet margin calls. They'd bet too much on risky stocks or on high-yield bonds, whose value slumped when stocks fell. Related: Stock Market Today: Stocks end mixed amid $9.5 trillion global wipeout The price of a bond is sum of the present value of the regular coupon payment (usually paid twice a year) and the present value of the principal value of the bond. When rates go up, the value of the income stream and the underlying bond must both fall. More Economic Analysis: Wall Street overhauls S&P 500 price targets as tariff selloff acceleratesInflation would like a word, pleaseStocks could bounce, but big bank earnings hold the cards If the position was built with a lot of borrowing, these investors might be forced to sell assets to make good on their obligations. When a situation like that arises, an investor often starts to fix the problem by selling his most valuable holdings first, according to Jeffrey Gundlach. Gundlach, CEO and chief investment officer of DoubleLine Capital, described the scenario during an interview with CNBC. Gundlach said he began to see forced selling on Friday when the Dow Jones Industrial Average fell 5.5% and the Standard & Poor's 500 Index dropped nearly 6%. And on Monday, the forced selling became even more visible amid wildly gyrating stock prices. Bond yields went up, and that depressed the market value on the bonds. Gundlach said he didn't think the selling is done. The S&P 500 could bottom at 4,500. But he added, "I think someone is going to go bankrupt." He was quick to add he knew of no one in trouble. Bloomberg/Getty Images But maybe these investors will dodge the bullet on bankruptcy. The stock market rebounded from morning lows that saw the S&P 500 fall to an intraday low of 4,835.04. That dropped the relative strength index for the S&P to a value of 19. RSI measures whether a stock is overbought or, in this case, oversold. Below 30 means something is oversold. That 19 level is considered by some to be a screaming buy signal, and futures trading Monday was signaling a big relief rally on Tuesday. Related: Here's what a Fed official calls central bank's bigger challenge Many bonds are not traded on organized exchanges. So it can be hard to see the math of what Gundlach was talking about. You can see it in the behavior of the SPDR Bloomberg High Yield Bond exchange-traded fund (JNK) . Shares of the ETF fell 0.9% to $91.61 Monday and are down 5.7% since hitting $97.12 on Feb. 28. The savings grace so far is that the ETF sports a distribution yield of 6.94%. The ETF is invested almost entirely in bonds rated BB or lower. Yahoo Finance data indicates it buys bonds in the energy industry. Energy is among the most volatile industries around. So, if interest rates go up or oil-and-natural gas prices go down, the fund price falls. Related: Veteran fund manager unveils eye-popping S&P 500 forecast The Arena Media Brands, LLC THESTREET is a registered trademark of TheStreet, Inc.
Yahoo
27-03-2025
- Business
- Yahoo
DoubleLine's Sherman Is Playing Defense as Tariffs Roil Bonds
(Bloomberg) -- DoubleLine Capital's Jeffrey Sherman has a word of advice for bond investors trying to navigate tariff threats and economic worries: now is not the time to take big swings. They Built a Secret Apartment in a Mall. Now the Mall Is Dying. Why Did the Government Declare War on My Adorable Tiny Truck? Trump Slashed International Aid. Geneva Is Feeling the Impact. Chicago Transit Faces 'Doomsday Scenario,' Regional Agency Says How SUVs Are Making Traffic Worse It is still unclear how consumers and the labor markets will respond to the higher inflation that could come as President Donald Trump raises levies on US trading partners, Sherman said on the sidelines of the Exchange conference in Las Vegas. Until there's greater clarity, he is leaning into shorter-duration, higher-quality credit after 'de-risking' last month. 'I think being a little defensive right now is the right thing,' said Sherman, the deputy chief investment officer at DoubleLine, which had $92 billion in assets under management at the end of 2024. 'I think now is the time to rethink things, and I don't think it's the time to be an extreme risk-taker.' 'Guess what? If you leave a little money on the table, it's not a big deal. We've made a lot of money in the the last two years,' he added. President Donald Trump's rapidly changing approach to tariffs has sent 10-year Treasury yields as high as 4.8% and as low as 4.1% this year, with traders vacillating between concerns about slower economic growth and higher inflation. That volatility has rippled out to corporate debt, leading to wider spreads on both investment grade and high yield bonds after they mostly ground tighter over the past year. Sherman is favoring fixed-income sectors that should be more insulated from the tariff threats, such as energy and technology. On the flip side, he's avoiding healthcare, which looks 'pretty dangerous' given how reliant the industry is on government contracts, which Trump has been cutting. He estimates that fair value for 10-year Treasury yields is likely 4.5%, versus about 4.3% currently. 'We're just going to have to see how the consumer responds and how the labor market responds to all of this, and no one knows right now,' Sherman said. 'And when you don't know, you don't make a big bet. Just try to keep it in the fairway.' Business Schools Are Back Google Is Searching for an Answer to ChatGPT The Richest Americans Kept the Economy Booming. What Happens When They Stop Spending? A New 'China Shock' Is Destroying Jobs Around the World How TD Became America's Most Convenient Bank for Money Launderers ©2025 Bloomberg L.P. Sign in to access your portfolio
Yahoo
18-03-2025
- Business
- Yahoo
Gold-Backed Tokens Outperform as ‘Bond King' Gundlach Sees Precious Metal Hitting $4,000
Gold has been on a strong run, surpassing $3,000 for the first time last week, and now there are calls for even more upside for the precious metal prices. Jeffrey Gundlach, CEO of DoubleLine Capital and colloquially known as the "Bond King" for his expertise in fixed-income markets, believes the rally is far from over and could see the precious metal top $4,000. Speaking during a macroeconomic outlook presentation titled 'Not in My Neighborhood,' Gundlach highlighted gold's sustained price momentum alongside other commodities. Cryptocurrencies backed by the precious metal, including PAXG and XAUT, have been benefiting from its historic price rise. 'I think gold will make it to $4,000. I'm not sure that'll happen this year, but I feel like that's the measured move anticipated by the long consolidation at around $1,800 on gold,' Gundlach said. Gold-backed cryptocurrencies have been outperforming the wider cryptocurrency market so far this year. While PAXG and XAUT are up roughly 14% year-to-date, bitcoin dropped 11.4% over the same period, and the broader CoinDesk20 Index retreated by over 25% in the same period. Gold ETFs last week have surpassed bitcoin ETFs in assets under management. His prediction is rooted in shifting central bank strategies. Global central banks have been increasing their gold reserves, reversing a period in which their holdings were dwindling. The total amount of gold held globally, according to IMF data Gundlach presented, has climbed from a low of around 34 billion Special Drawing Rights (SDR) in 2010 to 40.9 billion SDR, reaching levels last seen between 1975 and 1980. Special Drawing Rights are an international reserve asset the IMF created back in 1969, defined through a basket of currencies.
