Is a crisis looming? Why Ray Dalio and central banks are buying gold
(Kitco News) - While the Federal Reserve seems to hold a neutral view of the economy in the medium-term, prominent investors like Ray Dalio, as well as central banks, are stockpiling safe haven and hedge assets to prepare for what they believe is a coming economic downturn, this according to Phil Streible, senior market strategist of RJO Futures.
“One of the guys who I really follow, Ray Dalio and Bridgewater, they came out and bought about a billion dollars worth of put options in the S&P 500, so that tells you that these guys are preparing for some kind of crisis,” Streible told Kitco News.
On the economy, Streible noted that not all data are pointing towards a recession.
“If you look at the economic data that’s coming out, the data that has been dependent upon lower interest rates has all done quite well, like housing starts, housing permits, things like that. If you look at economic data that revolves around trade, like we’ve got durable goods coming out next week, that could be a miss,” he said.
Streible added that the Federal Reserve does not appear to be concerned with current economic data.
His comments come as the U.S. central bank released minutes from the October meeting stating that further rate cuts may be put on hold for now.