You can add another billionaire to the bullish gold camp as Thomas Kaplan, chairman and chief investment officer of Electrum Group said in a recent interview with Bloomberg that gold is on the cusp of a new decade long bull market.
In a preview clip of the interview Kaplan, who is also chairman of Novagold Resources (NYSE: NG, TSX: NG) said that because of economic fundamentals gold prices could rally as high as $3,000 to $5,000 within a decade.
Kaplan told Rubenstein he sees two possible scenarios for the yellow metal.
In the first, gold has already broken out and, as Jeff Gundlach puts it, “is coiling like a snake for its next move to take on the old highs.”
In the second scenario, gold could take one more head-fake to the downside, “just to shake out the weak hands.”
But then I do believe gold embarks on the next leg of its bull market and goes past $1,900 and ultimately $3,000 to $5,000, if not a lot higher, depending on macro circumstances that today seem dim but I can’t really quantify.”
Rubenstein asked how long he would have to wait to see that price level. Kaplan said he usually measures these kinds of moves in decades.
The first move, the first leg in gold took gold from $250 to $1,900. For 12 consecutive years, gold was up every single year whether there were inflation fears or deflation fears, strong dollar, weak dollar, political stability, political instability. It didn’t matter. Strong oil, weak oil. Didn’t matter. Gold went up for 12 years. That to me is a bull market. We’ve now been in a correction which has taken gold from $1,900 back to where we are today. You could easily see gold fall a couple of hundred dollars before going up a couple of thousand dollars. But each move has been a decade or more, which means that when gold embarks upon its next move, I believe that you will see that long wave take gold relatively quickly, but it will be measured in years, to the three to five thousand dollar target that I believe is fundamentally justified based on the facts that we have today.”
Kaplan is not the only billionaire investor to project an upcoming gold bull market. Earlier this month, SEC filings showed that Ray Dalio has increased his position in gold. During the Sohn Investment Conference, Jeff Gundlach said, “I love gold. I have owned gold since it was trading at $300.” And David Einhorn, founder of Greenlight Capital told Kitco News, “I hold gold, and I am never going to get rid of it. I hope that I never have to use it.
Kaplan is just the latest fund manager to jump on the gold bandwagon. Earlier this month, SEC filings showed that Ray Dalio’s hedge fund Bridgewater Associates increased its holdings in both SPDR Gold Shares (NYSE: GLD) and iShares Gold Trust (NYSE: IAU) in the first quarter of 2019.
This excerpt is from an original article published by Bloomberg.com on May 29, 2019
