John LaForge, Wells Fargo Investment Institute's head of real asset strategy, reportedly sees gold regaining its luster and delivering profits for investors.
"When your stock corrections are in the 10 to 15 percent level, which is kind of what we're in now, what we often find is that investors go out and search for some kind of insurance," he recently told CNBC.
"They typically will buy gold — even on a bounce in stocks," he said.
LaForge's bullish case is built on more than just the stock market cycle. The U.S. dollar index, which hit 52-week highs this week, is also a key element of his refreshed forecast, CNBCcom explained. "The dollar is a little too high. It has to back off," he said.
Gold and the dollar ususally move in opposite directions. A weaker dollar should boost gold. LaForge predicts $1,300 an ounce within the next 12 months, an 8 percent gain from current levels, CNBC explained.
Gold has a wide array of fans among highly respected investors, such as billionaire hedge-fund manager Ray Dalio.
Dalio’s Bridgewater Associates maintained its holdings in SPDR Gold Shares, the largest bullion-backed ETF, at 3.9 million shares, and its stake in iShares Gold Trust, the second-largest, at 11.3 million shares in the third quarter, according to a regulatory filing Tuesday.
The hedge fund also added to its holdings in Barrick Gold Corp., Franco-Nevada Corp., Newmont Mining Corp. and Kinross Gold Corp. in the third quarter, Bloomberg reported.
To be sure, other investment experts also have recently touted the importance of owning gold in your portfolio.
Investment guru Peter Schiff told Newsmax TV that the Federal Reserve’s strategy of hiking interest rates into the stratosphere will only push America into a recession when the “mother of all bubbles” finally pops.
“The economy is a gigantic bubble,” the Euro Pacific Capital CEO recently told “The Income Generation Show.”
“The Fed is likely to keep nudging rates higher. They're oblivious to what's going on. They have no idea that we're facing an economic crisis worse than 2008. We are looking at a stock market decline and a housing decline. In fact, this housing bubble is bigger than the one that burst in 2007-2008,” Schiff told host David Scranton.
As for what investors can do to find shelter from the looming storm, Schiff suggests looking beyond U.S. borders to foreign assets. “Undervalued foreign stocks that pay good dividends,” Schiff explained
He also suggested on gold and silver as “excellent” inflation hedges. “I think inflation is going to break out worldwide, not just in America. It'll be particularly pronounced in America but other nations are going to experience it. So you need to have gold and silver in your portfolio,” he said.
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