Paul Singer Says The Gold Rally Is Just Beginning
Billionaire hedge fund manager Paul Singer bets big on gold due to global currency "debasing," but Goldman sees losses for the yellow metal, according to a report on Bloomberg.
Bloomberg said gold for immediate delivery surged 16 percent in the first quarter, the biggest quarterly surge since 1986, as the "Federal Reserve avoided tightening and central banks in Europe and Japan pressed on with negative interest rates."
Meanwhile, the report also recalled that billionaire investor Stan Druckenmiller said last week gold is his largest currency allocation and the bull market in stocks was exhausted.
"It makes a great deal of sense to own gold. Other investors may be finally starting to agree," Bloomberg said citing Singer's April 28 letter to clients. "Investors have increasingly started processing the fact that the world's central bankers are completely focused on debasing their currencies."
If investors' confidence in central bankers' "judgment continues to weaken, the effect on gold could be very powerful," Singer added. "We believe the March quarter's price action could represent something closer to the beginning of such a move than to the end."
However, a recent report from Goldman Sachs contradicts Singer's view.
A note from the brokerage shows that it still expects weaker gold prices over the next 12 months.
"Goldman's new forecasts put bullion at $1,200 an ounce in three months, $1,180 in six and $1,150 in a year, up from $1,100, $1,050 and $1,000. There's limited room for further gains as the Fed will probably tighten in September, and may move in July," Bloomberg reported.
At the time of writing, gold for June delivery rose $13.20, or 1.04 percent, to $1,278.00. The commodity has been trading in the range of $1,266.30 - $1,280.80 during the day.
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