More investors are turning to precious metals such as gold and silver as inflation, geopolitical tensions, and various risk factors poise to destabilize the dollar.
Spartan Capital Securities’ chief market economist Peter Cardillo, a 50-year market analyst, said there are several aspects investors should include in their investment strategy.
He emphasized the importance of having a percentage of gold in investment portfolios due to its role as a hedge against various economic uncertainties. The analyst believes gold remains a valuable asset for investors, particularly as a safeguard against geopolitical issues, inflation, and market volatility.
“I think owning gold at this level still makes a lot of sense,” Mr. Cardillo told The Epoch Times.
The analyst suggests that while it may not be the optimal time to buy gold at its current levels, investors who do not yet have gold in their portfolios should consider taking a position. For those already invested, the recommendation is to hold rather than buy more at present.
“I believe that every portfolio should have some sort of percentage hedge against geopolitical problems, inflation, and, of course other market conditions that may cause turmoil within the global market system,” Mr. Cardillo said.
“If someone is in it, I certainly probably wouldn’t buy it at these levels. I would wait for a pullback, but if someone is not in it, I certainly would take a position.”
The advised allocation is a minimum of 5 percent and a maximum of 10 percent of one’s portfolio, depending on the overall size of the investments.
Potential Risks and Market Concerns
Addressing concerns about potential government confiscation, reminiscent of the 1933 scenario under President Franklin D. Roosevelt, the expert acknowledged that while such a risk exists, it is relatively low in today’s context.When asked about the possibility of a repeat of the gold confiscation, Mr. Cardillo said: “There’s always that kind of risk. But you know, when you look at the demand for gold right now, it’s worldwide, especially in Asia, was very strong in China. And then, of course, it is moved right across the Asian continent. And so we’re seeing the force of retail buying into the market, and that’s usually a very strong, fundamental viewpoint.”
Daby Benjaminé Carreras, another financial expert, pointed out that in past instances, individuals often found ways to protect their assets by moving them internationally.
“The last time that was done during FDR it was really interesting,” Mr. Carreras told The Epoch Times. “We know that what people normally do is they just ship their gold outside of the United States.”
The analysts also dispelled concerns about liquidity in drastic scenarios.
“There’s always a market for gold. You might not be able to sell it at a level that you want to sell it but there’s always a buyer for gold,” Mr. Cardillo said.
Responding to the same question, Mr. Carreras said: “Gold is actually money. Gold is the only thing in the universe which is actually money.”
Bullish Supercycle for Silver
Mr. Carreras, a 2021 candidate for New York City comptroller and a private wealth manager, is very bullish on gold, and even more on silver.He predicts a significant upward trend. “I’m very, very bullish on gold and silver,” the expert stated, adding, “I’m even more bullish on silver. I think we have a supercycle on silver and gold.”
A supercycle in stock trading refers to an extended period of growth or expansion in a financial market, typically marked by rising prices and heightened demand.
The expert emphasized the value of looking at national debt and money supply metrics, using tools such as the national debt clock to understand the broader economic landscape. “Gold is at a 7x discount and silver is at a 70x discount right now,” he explained, pointing out the substantial undervaluation of these metals.
Mr. Carreras strongly advised investors to consider adding gold and silver to their portfolios, emphasizing the mistake of not owning these assets in the current economic climate. “If you don’t own it now, it’s probably a mistake,” he asserted. He recommended looking into companies with mining operations in key regions such as Nevada, Arizona, and Mexico for silver, and Peru and Brazil for gold.
Mr. Carreras is able to track the data through the study of filings, press releases, NI 43-101 reports (standards for reporting mineral projects), preliminary economic assessments, filed assessments, and drill intercepts. He also emphasized “seeing exactly if they’re doing well with their ESG practices, which is incredibly important,” he said, referring to environmental, social, and governance practices.
The expert also touched on global economic and geopolitical factors that could influence the precious metals market. He noted China’s decreasing support for its supply chains and rising shipping costs, which are shifting the dynamics of global trade.
Additionally, he discussed potential changes in currency classifications by countries such as Russia, which could further impact the value and demand for gold and silver.
“When I go to any kind of money changing companies, or any kind of transit, when I fly outside the country ... you change your transaction dollars, they don’t even report what it is for Russia. It’s because it’s off the chart,” Mr. Carreras said.
“So I can only think that they’re going to since they’re supporting all the energy in Europe, I mean, Germany would be sitting in the dark, if it wasn’t for Russia, and the expenses have gone up. And inflation has gone up in the United States—gas went up 2.8 percent since April, and it’s up 70 percent utilities across the United States, but in Russia, in Europe, it’s even worse. So I think that they’re going to reclassify their currency. And we’re going to see what’s going to happen to India and China, if they’re going to change [regarding] their oil.”
