Chris Mancini: It's Been Tough — but Now is the Time to Invest in Gold | Summary and Q&A

TL;DR

Analyst Chris Mancini discusses his views on gold, stating that while it has performed as expected so far this year, an inverted yield curve and physical demand due to geopolitical risks are needed for gold to rally significantly.

Key Insights

• 🫥 Gold performance has been in line with expectations, with the large tax cuts providing stimulus to the US economy and preventing an inverted yield curve.
• 🏅 An inverted yield curve and physical demand due to geopolitical risks are needed for gold to rally significantly.
• ✋ The current geopolitical risks are not high enough to significantly impact the gold price.
• ☠️ The Fed is expected to have a couple more rate hikes this year, as the economy is currently being supported by the effects of the tax cuts.
• 🧡 Gold is predicted to remain range-bound between $1300 and $1375 this year, with an expected increase above $1400 next year.
• 🍉 Patients and long-term investors may find value in gold stocks at the current price levels.
• 🧑‍🏭 When selecting gold stocks, factors such as the quality of assets, management capabilities, and valuation need to be considered.

Transcript

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Questions & Answers

Q: What is your view on gold performance so far this year?

Gold has performed as expected, with the large tax cuts stimulating the US economy and keeping the yield curve from inverting. However, for gold to rally significantly, an inverted yield curve is needed.

Q: How do geopolitical risks affect the gold price?

Geopolitical risks can have an effect on the gold price if they lead to physical demand from countries facing such risks. However, Mancini believes that the current geopolitical risks, such as the tension between North and South Korea, are not high enough to significantly impact the gold price.

Q: How many rate hikes do you expect from the Fed in 2018?

Mancini predicts that the Fed will have a couple more rate hikes this year, following their schedule. He believes that the large tax cuts have provided enough stimulus for the economy to handle these rate hikes without major issues.

Q: Do you have a specific gold price prediction for this year?

Mancini expects gold to remain range-bound between $1300 and $1375 this year. He believes that next year, the gold price will likely move above $1400, and a sustainably higher gold price will lead to an increase in gold stocks.

Summary & Key Takeaways

• Chris Mancini is an analyst at Gabelli Asset Management, primarily focusing on mining companies, especially precious metal mining companies.

• He mentions that the gold market has performed as expected so far this year, with the effects of the large tax cuts providing stimulus to the US economy.

• Mancini suggests that an inverted yield curve and physical demand from countries facing geopolitical risks are necessary for gold to see a sustained increase.