'I don’t like the idea that people don't have exposure to gold', but choose your buying days wisely, says Jim Cramer
(Kitco News) It is important to have at least 10% of your assets in gold, but investors can’t forget about choosing the days when to get into the market wisely, said CNBC’s Jim Cramer.
“I just don’t like the idea that people don’t have exposure to gold but there are days when it is worse to buy gold than other days,” Cramer told TheStreet on Monday when gold hit its new all-time highs after breaching the $1,920 an ounce for the first time since in 2011.
The comment was part of Cramer’s answer to the question: When as an investor can I buy gold?
Cramer said he struggled with the answer. “I’ve always said that 10% of your assets should be in gold and that’s what I am unwavering in saying. I thought one day that the government would go mad and print as much money as possible, which is something that happened in Germany in the ‘20s and something that happened in France in the ‘30s,” he said.
He elaborated on why it is hard for him to answer this question with an example of a gold mining company he liked for a long time now — Barrick Gold.
“I happen to like Barrick Gold. Well someone can say that Jim is calling a peak in Barrick Gold [because] Jim is saying to buy Barrick Gold right now after all this,” he said. “So philosophically, what would you do if you were me? Do you say you like Barrick Gold running the risk that it is after you liked it since $13, and you’ve had it double?”
The gold rally seems to be on an unstoppable upwards trajectory this week, reaching a new all-time high of $1,974.70 in nearby Comex futures on Tuesday. August Comex gold futures were last trading at $1,951.90, up 1.08% on the day.
The bullish sentiment is being driven by two major factors — massive money printing and the COVID-19 recovery outlook, Cramer noted.
“The gold run is a combination of central banks printing money but also a pessimistic view of what is going to happen with COVID. The stock market has a much more optimistic view of what happens with COVID,” Cramer told CNBC on Monday. “I’ve never seen a moment where you have a coiled spring of good news … but if we don’t get a vaccine, just get ready for another one of these things in a couple of months … I don’t know if people are really ready how long this is going to take.”