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Why geopolitics, gold and investors may not mix

Kitco News

Sharp upticks in gold off of news like coronavirus and the Iran assisination may be ultimately harmful to gold investors, said Brien Lundin in a discussion with Kitco News in January at the Metal Investor Conference.

Lundin runs the Gold Newsletter and also hosts the New Orleans Investment Conference. At the start of January, gold spiked to a multi-year high after Iran bombed U.S. military bases in Iraq in retaliation for the assasination of Qassem Soleimani.

"When the missiles flew, it had the effect of temporarily derailing the gold rally because people got confused. They think gold was moving for these geopolitical reasons," said Lundin.

Lundin notes that after these events pass gold usually heads back down.

"You can't predict these things. You can't trade them, and its not anything that will support a long-term consistent gold-bull market."

Lundin believes the underlying driver of gold is debt, which weakens the stability of fiat currency.

"The big issue to me is the debt. The debt is so large we can't approach anything like normalized interest rates."

Listen to our interview with Brien Lundin.

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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