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DoubleLine Doubles Down On Gold; Only A Matter Of Time Before Prices Hit $1,400

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Jeffrey Sherman
Deputy chief investment officer at DoubleLine Capital

(Kitco News) - Gold will be the asset to own when the next economic crisis hits, and it could be only a matter of time before prices push through $1,400 an ounce, according to one chief investment officer.

In an interview with Kitco News on the sidelines of Inside ETFs Canada conference in Montreal, Jeffrey Sherman, deputy chief investment officer at DoubleLine Capital, said that he likes gold in the current environment, but added that investors still need to be patient.

“I think you just need to wait for prices to break out above $1,400,” he said. “That will probably happen when the next crisis hits.”

Sherman, a keynote speaker at the conference, said that gold is a lot more attractive than bond yields, which continue to trade near a two-year low. The 10-year yield last traded at 2.09%. Meanwhile, gold continues to hold near last week’s 14-month high; August Comex gold futures - $1,347.60, down 0.23% on the day. 

Sherman said that gold is a lot more attractive than government bonds and the U.S. dollar because of ballooning government debt. During his presentation, he said that government debt could soon rise to record levels.

“When the next crisis hits, you certainty don’t want to own Treasuries,” he said. “Gold will be the asset to own.”

Doubleline is doubling down on its bullish gold outlook. Last week during an investor webcast, Jeffrey Gundlach, the founder of DoubleLine Capital, said that he sees higher gold prices and a weaker U.S. dollar by the end of the year.

“I am certainly long gold,” Gundlach said.

Gundlach also increased his bearish view on the U.S. economy, saying there is a 40-45% chance a recession within the next six months, and a 65% chance in the next 12 months.

By Neils Christensen and Sarah Abu-Shaaban of Kitco news;
nchristensen@kitco.com and sabu-shaaban@kitco.com

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