With the local economies continuing to slow and central banks beginning to ease monetary policy, it is a good bet to have a certain amount of cash placed in gold, says Peter Cardillo, Chief Market Economist, Spartan Capital Sec. Excerpts from an interview with ETNOW.
Want to get your reaction to Trump’s latest move. There is still so much uncertainty in his commentary. He is saying we are slapping that 10% tax but talks are still constructive. This is clearly a pressure tactic but equity markets do not know which way to turn? Yes, it is a first attack. This threat of imposing tariffs on Chinese goods is his way of trying to get a deal completed. The deal eventually is going to come. Many believe that there will never be a deal, but I do not think so. I think there will be a deal and I am surprised that it has not happened yet.
At a time like, which asset classes do you diversify into? Gold prices have shot up to six-year high. The 10-year yield in the US has hit the lowest level since 2016 while US equities are facing knee-jerk reactions. Emerging markets including India are seeing a lot of pain. What would you tell investors to do at this juncture?
I would certainly make sure that there is a certain amount of gold holdings. That would be a very prudent thing to do. I always believe in having some in shares and I would say due to the present situation, it is probably wise to up gold holdings by 5% or 10%. With the local economies continuing to slow and central banks beginning to ease monetary policy, it is a good bet to have a certain amount of cash placed into gold.