With gold near all-time highs, one market expert warns it may be acting more like a risk asset than a safe haven.
Transcript:
CAROLINE WOODS: Well, if you’re expecting this day of reckoning for live cattle futures because of the momentum chasing. Does that mean you expect something similar to happen to the stock market, to Bitcoin, to gold as well. All of which are near all time highs?
CARLEY GARNER: I think these assets are very vulnerable. I think there’s the potential for a pretty big fallout in each of those. Particularly I feel the most confident about gold. And the reason being, I think that the gold market I’ve seen this action before. I’ve seen all of these types of excessive headlines before. That was in 2011, when gold peaked out and took a 45% haircut and took a decade to recover. So gold is a safe haven sometimes, but not always. I believe that these prices gold is actually a risk asset, not a safe haven. It doesn’t pay dividends or interest. It’s at all time high prices. And if the dollar bottoms out like I think it will, that’s going to push gold down. Let me just put it in perspective. If the dollar trades identical to how we did in Trump 1.0, which so far it’s following that playbook. If that happens, we should see the dollar index trade up to 108 110. That alone, all else being equal, pushes gold below $3,000. So you want to be really, really careful if you’re a gold bull up here. It’s a time to take some money off the table and wait for a big pullback. Because pullbacks in gold can be very treacherous. As far as the stock market goes my charts I see pretty good resistance around 6,500 which we’re basically there. And when I look for support I don’t see good support until we get into the 5,000 like low 5,000. So in my mindset there’s a lot more risk than reward in the stock market. But of course, you know, this is a market that’s been on fire. And maybe it just keeps going up. Momentum tracers are hard to deter. So you know I’m not going to try to predict anything. But I will say we are on some shaky ground. And if and when there is a pullback, it could be maybe not quite as scary as what we saw in April, but something similar.
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