The gold rally is being driven by growing worries about global economic stability and escalating US-China trade tensions. A weakening US dollar, which fell to a three-year low, has also boosted gold by making it cheaper for investors using other currencies.
Also Read: Gold rates in India today: Prices climb as global market hits new peakYardeni began recommending gold when it moved above $2,000 per ounce last year.
Yardeni pointed to global uncertainty as one of the main reasons. He said recent geopolitical shifts have created what he calls a “new world disorder.” Central banks are also buying more gold, and he thinks this trend will continue.
“Gold has to be in a portfolio as an offset to all the turbulence,” Yardeni said. He mentioned that gold helps manage risk from unstable stock and bond markets.
Also Read | Worst of earnings cuts may be behind: Invesco’s Taher Badshah prefers these sectors
Gold prices have moved up very quickly of late, which could lead to a short-term correction, he said adding that “If there is a correction, it will be an opportunity.”
He noted that central banks in countries with weak ties to the US are buying gold instead of holding US dollars.
On the broader trade situation, Yardeni expects some progress by mid-year. He mentioned that President Trump delayed some tariffs until July 1, and said, “There is going to be some good news along the way, and that should help the stock market.”
Also Read | India is well placed amid tariff tensions, but still not cheap: Adrian Mowat
In India, Yardeni said he sees strong potential for a US trade deal. He expects the administration to aim for a quick agreement, even if it is mostly symbolic. “The President is going to declare victory by July 1,” he said. He also noted that investors are more willing to back India, seeing it as a more stable and promising market than many others.
Yardeni added that US assets are no longer viewed as a guaranteed safe haven. “The whole concept of US assets as a safe haven is being challenged,” he said.
For the full interview, watch the accompanying video
Catch all the latest updates from the stock market here
