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Analysts Share Their Views On Gold

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Analysts Share Their Views On Gold

On CNBC's "Trading Nation," Steve Chiavarone of Federated Hermes said gold is difficult to analyze because it has no cash flows, so you're just trying to understand what the demand is going to be and that is a bit of a gamble.

He finds gold's rally logical because the economic growth fell of a cliff and there was an unprecedented stimulus by central banks. Uncertainty is also high. Over the long run, Chiavarone sees stocks as a better bet than gold as we're looking toward the eventual recovery for the economy.

See Also: 8 Best Investment Strategies During A Recession

Bill Baruch of Blue Line Capital said he loves gold and investors need some gold in their portfolios.

He noticed on its chart a bullish technical pattern called inverse head and shoulders that played out through March into April. He doesn't like to chase gold when everybody else is screaming for it. You want to be capitalizing on gold that you own during those times, said Baruch.

However, he said the precious metal is going to trade to $2,000 over the rest of this year because of the massive liquidity injected by the Fed. The stimulus is going to support asset prices like equities, but it's also going to support gold.

Baruch would look for a pullback to $1,700 as a buying opportunity. Investors who want exposure to gold, but don't want to trade futures, should take a look at SPDR Gold Trust (NYSE: GLD).

 

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