Market Overview

Why Brian Kelly Is Betting On Gold For 2015

Why Brian Kelly Is Betting On Gold For 2015

Brian Kelly is long the gold miners.

He’s the founder and managing member of Brian Kelly Capital, and he recently joined Benzinga’s #PreMarket Prep to talk about why he thinks 2015 could be a big year for gold.

Kelly said he’s thought this for a while now, but there are multiple factors that could make it come to fruition in the upcoming year.

“One, if the economy does get much stronger, at some point in time, you may get somewhat of an inflation plan there,” he said, but noted that it looks like the economy is seeing more deflation, if anything.

Related Link: Why Dennis Gartman Says Oil Will Go 'Demonstrably Lower'

More importantly, Kelly explained that the central bank-buying and physical buying of gold, which he said is happening in Asia, did happen in Russia and could potentially happen in Europe.

“That, to me, is the big factor in the gold market of 2015: that physical buying,” he said.

There’s a disconnect between physical buying and the gold ETFs, the paper gold, Kelly went on, which is why he liked the gold miners better. He’s long the Market Vectors Gold Miners ETF (NYSE: GDX).

He likes those because that’s how an investor purchases gold without actually taking possession of the bar, itself. Kelly expects the miners to outperform on the upside in the coming year. For example, if gold is up 1 percent, he said investors can expect to see miners up 2 to 3 percent.

The SPDR Gold Trust (NYSE: GLD) and iShares Gold Trust (NYSE: IAU) both traded about 1 percent higher in Tuesday's session, while GDX traded up more than 4 percent.

Kelly also talked about crude oil and the U.S. dollar.

Check out his full interview here:

Don’t forget to tune in to Benzinga’s #PreMarket Prep broadcast Monday-Friday 8-9:45 a.m. ET for a live, interactive morning show with veteran traders and featured finance industry experts ready to answer your questions for the trading day.

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