Gold Vs Treasuries: What’s The Best Buy Right Now?
(Kitco News) - When choosing between investing in gold or 10-year Treasuries, what’s the best play at the moment?
“Gold … no question about it,” SkyBridge Capital co-chief investment officer Troy Gayeski told Bloomberg on Wednesday. “If you are looking at economic growth, the future path of the Federal Reserve, and total return in the next several years. No doubt, [the answer] is gold.”
Investors need to consider the global macroeconomic outlook, which points to gold being able to re-test its all-time highs during the next recession, said Gayeski.
“If you look at the future path of monetary policy, not only in the U.S. but overseas, it is going to be lower rates. During the next recession the Fed is going to zero,” he stated. “Gold could re-test its highs from 2011. [Gold has] more upside and the wind at [its] back from global central banks.”
The 10-year Treasuries, however, are likely to head down during the next recession. “The 10-year Treasuries are already at 2%-2.1%. We see that going to 1%-0.5% in the next recession,” Gayeski pointed out.
At the time of writing, August gold futures were trading at $1,427.80, up 0.32% on the day and U.S. 10-year Treasuries were at 2.05%, down 0.21%.
“In the late 90s we had tremendous outperformance of growth of all stripes. And what triggered that reevaluation was a dramatic economic slowdown, which is where we are today. There is a potential of that today, but it is a leap of faith,” Gayeski said.