'Wall Street legend' Ray Dalio: "Gold is still a good investment"

Source

Korea Economic Daily

Summary

Ray Dalio said the world is on the verge of a capital war and FX and capital controls, and that gold remains the best place to preserve money.
International gold prices surged about 6% to $5,084 per troy ounce, marking the biggest gain in about 17 years; Wall Street says it is only a matter of time before a new record high is set.
JPMorgan raised its year-end gold forecast to $6,300 and its end-2027 forecast to $6,600, and set its year-end silver forecast at $85.

Commodities Focus

Demand persists for alternative investments to U.S. assets

Gold posts biggest one-day gain in 17 years

JPMorgan sees "$6,300 by year-end"

"The world is on the verge of a capital war, and gold is still the best place to preserve money."

Ray Dalio (pictured), the legendary Wall Street investor and founder of Bridgewater Associates, the world’s largest hedge fund, said in an interview with CNBC on the 3rd (local time) that "demand for gold won’t diminish because the move to diversify away from U.S. assets is continuing," adding the remarks above.

After a steep drop, international gold prices posted their largest one-day gain since November 2008—about 17 years. According to Reuters, spot gold jumped about 6% from the previous day to $5,084 per troy ounce as of 3 p.m. Korea time. While it remains below last week’s all-time high ($5,594.82), Wall Street is increasingly saying it is only a matter of time before gold sets a new record.

Dalio said, "Historically, capital wars have involved measures such as FX and capital controls," adding, "Even if precious-metal prices fall broadly amid such tensions, gold is still the best place to preserve money."

He continued, saying that "It’s a mistake to ask whether gold will rise or fall further and whether you should buy," and added that central banks, governments, or sovereign wealth funds should discuss how much gold to hold in their portfolios and maintain a set allocation.

Peter Grant, vice president and chief metals strategist at precious-metals brokerage Zaner Metals, assessed that the recent price decline was a technical correction within a long-term uptrend, and said the fundamental factors supporting higher gold prices remain solid. He forecast that "gold is unlikely to plunge further," with support likely forming around $4,400 per troy ounce and resistance around $5,100.

JPMorgan raised its year-end gold price forecast to $6,300 from $5,055, and its end-2027 forecast to $6,600 from $5,400. The bank cited that "the dominance of real assets remains firmly intact, so long-term upside momentum will stay in place despite near-term volatility."

Silver prices also rebounded. After falling to $71.38 per troy ounce on the 2nd, silver climbed to around $87. JPMorgan put its year-end silver price forecast at $85.

Choi Man-su, reporter bebop@hankyung.com