I’m Not Buying Into The Real Strength Of Economy - Expert
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(Kitco News) - Last week’s stronger than expected GDP numbers revealed a strong quarter for the stock markets and solid consumer confidence, but does not point to true underlying strength in the overall economy, this according to Chris Mancini, analyst at Gabelli Gold Funds.
“I’m not buying whether or not there’s that real, real underlying strength in the economy. To the degree that there is strength I think it’s pulled forward,” Mancini told Kitco News on the sidelines of the Mines and Money New York conference.
Headline GDP grew by 3.2% in first quarter, topping expectations, with exports rising 3.7% and imports decreasing by 3.7%. Core inflation climbed 1.3%.
“Consumer sentiment increases during a very buoyant stock market. The stock market did increase in the first quarter by something like 20%,” Mancini added.
On the mining sector, Mancini said that a good analogy to describe the gold price cycle is to use a coffin.
“I think that in terms of the sentiment within the gold market and the gold mining market is that we’ve had a few near death experiences, in terms of being put in the grave. So when gold went down to $1,050, for the gold mining sector, that was one step above the bottom of the grave,” he said.