Daily Outlook

Gold growth to $4K is possible

Stocks and bonds may be in an asset bubble, as record-low interest rates and a tremendous increase in the money supply have sent prices soaring this year. Add gold, which has risen 35% to $2,049 an ounce Aug. 5, to the list.

But Michael Cuggino, CEO of the Permanent Portfolio Family of Funds, says gold can move a lot higher. It would “not be an unreasonable move” for gold to breach $4,000, he said in an interview.

Cuggino manages the Permanent Portfolio, a $1.9 billion mutual fund that is conservatively run and rated four stars by Morningstar in the fund-research firm’s “U.S. Fund Allocation — 30% to 50% Equity” category.

Take a look how monthly prices for an ounce of gold (per continuous gold contracts on the New York Mercantile Exchange) have moved over the past 30 years: You can see the triple bottom from the end of 2015 through November 2018.

Gold may extend gains as money is being pumped into the U.S. economy, the dollar is declining, and investors are fearful that inflation may return, he said.

When looking back at how gold and stock prices have moved over the very long term, Cuggino said gold is still trading at an inexpensive level when compared with stocks.

Gold rising to $4,000 an ounce ‘would not be an unreasonable move,’ fund manager says, MarketWatch, Aug 7

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