Written by Bryan Lutz, Editor at Dollarcollapse.com:
The biggest bond traders are going for gold.
DoubleLine’s Chief Executive and Chief Investment Officer Jeffrey Gundlach says,
“I think of gold as a real asset class. It’s no longer for lunatic survivalists and wild speculators,” with central banks also buyers.
Yet, Central Bankers have been net buyers of gold for over a decade.
Almost as long as the gold bugs.
So, who’s really the “lunatic survivalists?”
MarketWatch reports:
Gundlach says gold is no longer for lunatics as the bond king says wait to buy the 30-year
“Gundlach noted that markets are behaving “strange” and “differently,” in an interview with Bloomberg late Wednesday…
…“I think what we have is a recognition that the interest expense for the United States is untenable, if we continue running a $2 trillion budget deficit and we continue to have sticky interest rates,” he said.
“There’s an awareness now that the long-term Treasury bond is not a legitimate flight-to-quality asset. It’s not responding to lower interest rates, it’s not really responding to an inflation rate, which is now 2.5%,” and likely to go higher, he said.
The manager, nicknamed the bond king, said they are “very uninvolved in the long-term [30-year] Treasury bond,” because of his belief yields will rise when the U.S. economy starts to weaken or the Fed cuts.
He’s waiting for the yield to possibly hit 6%, and trigger quantitative easing.
“You could get a 20-point rally on the long bond if they announced they are buying the long bond,” he said.
Gundlach said that while the long bond is no longer a flight-to-quality asset, gold is.”
It’s a matter of perspective, I suppose.
But in my opinion, the bigger the picture, the more clear the picture.
Not only are bond traders like Gunlach waiting out the big bond market trade, they see the bigger macro trend.
Here is a bit of a lead up:
Compared to stocks and bonds…
Gold is making gains.
And the trend is looking a lot like post-1976, but bigger.
That’s because it is mostly propelled by Central Bank buying (which you know bond buyers are also watching).
Each year, gold is becoming a bigger part of global reserves.
In fact, some countries like China have been secretly buying gold under the table and stockpiling it for years.
Jan Nieuwenhuijs reports:
Secret Gold Purchases by Chinese Central Bank Reach Mainstream Media
“I first revealed evidence about secret gold purchases in 2023, after two industry insiders pointed out to me a discrepancy between the World Gold Council’s quarterly estimates on total central bank buying, based on field research, and official data by the IMF, based on what central banks admit to have bought.
“The difference is mostly caused by the People’s Bank of China,” I was told.
Mind you, by that time the difference had already accumulated to 2,000 tonnes (today, it’s at 3,500 tonnes).
Since then, I have been researching “unreported purchases” by central banks because of their significance to the global financial system.”
So, who are the “lunatic survivalists?”
When it comes to survival, it’s the Central Bankers and the States that back them. They’re buying the biggest amounts of gold.
Not the average gold bug.
