Why is George Soros Betting So Big on Gold?
A new gold rush is on!
Diminished expectations for Fed Reserve rate hikes have stimulated a new bubble in all things that glitters, from gold futures to gold mining stocks to exchange-traded investments that allow traders to wager on gold’s everyday fall and rise.
Following a three-year-long break, George Soros, a man who broke an England Bank for short-selling the pound and once termed gold “the ultimate bubble,” is back to purchase the precious metal; gold. And, while he appears pessimistic about more than half of the world, he has the United States in his sight line this time.
Over the years, George has made a series of exceptional investment opportunities and trades. He is among the most well-known investors in the financial world and famous for placing large currency stakes on a worldwide scale. You’ll never forget him among the few institutional investors who can profit irrespective of market conditions and direction.
But is George Soros bracing for a storm? Let’s go deeper;
Why is George Soros so bullish on gold?
Many people regard gold as a safe investment, not just because it’s a traditional measure of value with a long history. The price has gone up frequently in recent eras during periods of economic crisis, such as when global financial problems erupt, and deflation or inflation begins to rumble.
Investors all over the globe made note this week after financial records disclosed that George recently purchased a $264 million shareholding in the world’s biggest gold production company, Barrick Gold, as well as $123 million in the SPDR Gold Trust. By buying 2.1 million put options, he made an enormous bet against the S&P 500 index. The integration of these trades suggests that the iconic investor now considers gold to be among the best options presently available and gearing up for a stock market crash.
These doubts have been bolstered by some latest remarks posted by George on the world economy. Soros hasn’t elaborated on the causes for the latest gold price shift. Looking at his recent comments, it appears that he claims to believe the economy of China will collapse, resulting in negative consequences for different markets around the globe. For example, take equities in that nation.
As per George, China seems to have a significant adjustment issue. He said that it would amount to a crisis. Looking at the economic markets, he sees a severe threat that reminds him of the financial crisis of 2008. Soros further said that a Chinese financial catastrophe is “practically unavoidable” and that an event like that would lead to global consequences.
However, he still appears to seek refuge in the precious metals, a traditional safe-haven asset in uncertain economic times. This year, gold has risen nearly 21% and shows no signs of slowing down. In the aftermath of the most recent recession, gold reached an all-time peak. It’s also elevating gold mining company stocks up with it on this upward journey.
The commodity price has risen significantly this year, following Barrick Gold’s footsteps. There seem to be several reasons why confident investors seek out ostensibly safe-havens.
With so many experts recommending gold as a secure and safe asset class in these times of financial ambiguity, gold IRA companies saw a surge in current attention in financial products supported by the stability and value of precious metals. Because many people consider retirement to be the most critical financial primary objective, it will only mean investing in a secure and safe asset that has outperformed other investment opportunities in economic turmoil times.
So, should you choose gold, do that because you are confident that the worth of those gleaming bars will keep rising for whichever reason(s). Not because a wealthy tycoon is stockpiling them.
The Take Away
So, whether you think it’s a good idea to go, gold prospecting with George changes depending on how you see the markets’ near-term future.
If you believe a large equities sale is imminent, or that the Fed’s initiatives will deflate or inflate the currency, or that some other challenges will cause a gold bug swarm, you should consider a Soros-style step in the commodity’s direction. If not, gold is probably not the best asset for you right now. But keep in mind that the gold moves higher when a more significant percentage is afraid!