Gundlach and Dalio make the case for buying gold
Ray Dalio is out with a new post on his LinkedIn page and argues that political risks are rising.
He writes:
We are seeing 1) two confrontational, nationalistic, and militaristic leaders playing chicken with each other, while the world is watching to see which one will be caught bluffing, or if there will be a hellacious war, and 2) the odds of Congress failing to raise the debt ceiling (leading to a technical default, a temporary government shutdown, and increased loss of faith in the effectiveness of our political system) rising.
On what happens, he said they are humble and have no unique insight but prefer to hedge their bets.
We can also say that if the above things go badly, it would seem that gold (more than other safe haven assets like the dollar, yen, and treasuries) would benefit, so if you don't have 5-10% of your assets in gold as a hedge, we'd suggest that you relook at this.
Meanwhile, Jeff Gundlach made a similar case for gold on his twitter earlier this week, noting a cup-and-handle pattern.
He didn't elaborate but earlier this week he was doing the rounds saying that the VIX could double to 20 from 10. That trade is off to a great start with the index at 13.92 now.
Whatever happens, the $1300 level in gold is huge in the week ahead.
