Metals Market Report Archive
Metals Market Report 04-18-2019

The Mike Fuljenz Metals Market Report

April 2019 - Week 3 Edition

Legendary Billionaire Hedge Fund Legend Ray Dalio is Bullish on Gold

Ray Dalio, founder of the world’s largest and most successful hedge fund, Bridgewater Associates, was featured on 60 Minutes last week. He also wrote a great new book on economic history, predicting a coming debt crisis, called, “Big Debt Crisis” (published November 2018). Last year, the S&P 500 lost about 6% (and investment firm DALBAR says that the average investor lost 9.4% in 2018), but Dalio’s flagship Pure Alpha strategy delivered a positive 14.6% gain in 2018, a very tough investing year.

Part of Dalio’s success comes from his significant positions in gold across all tiers of the industry – from physical gold (via the SPDR gold ETF) and a variety of gold mining shares. He has been a long-term gold bug, saying: “If you don’t have 5-10% of your assets in gold as a hedge, we’d suggest that you relook at this. Don’t let traditional biases, rather than an excellent analysis, stand in the way of you doing this.”

Central Banks are Buying 60% More Gold in Early 2019

Banks in the old Soviet Union’s eastern European satellite nations have each bought several tons of gold in early 2019.  Poland, Hungary and the Czech Republic have bought at least six tons each. China increased its gold holdings in March for the fourth straight month. The People’s Bank of China raised its gold reserves to 60.6 million ounces (1,885 metric tons), as trade tensions between the U.S. and China continue unresolved.

China, Russia and Kazakhstan were the top central buyers of gold in 2018. In 2019, central banks bought a net 39 metric tons of gold in January and 51 tons in February according to a recent report by the World Gold Council. The total of 90 metric tons in the first two months of 2019 is more than 60% greater than the 56 tons central banks bought in the first two months of 2018 as central banks—mostly from the emerging markets—continue to accumulate gold at a rapid pace.

Gold Outperforming Stocks, Bonds and Real Estate in the 21st Century

Gold dipped below $1,280 Tuesday morning to its lowest level since December 30, 2018, but it’s important to remember that gold is still outperforming stocks, bonds and real estate in the 21st Century, by a wide margin. Our weekly statistics show that gold is up about three times as much as stocks since 1999, and a new study from JPMorgan shows that gold soundly beat stocks, bonds and real estate since January 1, 1999:

 

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