Entering 2021, the gold market, which has risen for more than a year, suffered severe shocks and hindered the upward trend. Gunrak (Jeffrey Gundlach), chief executive of New Bond King and DoubleLine, said he was neutral on gold and Bitcoin and believed that investors should allocate 25 per cent of hard assets in their portfolios.
"25 per cent of the portfolio should put some hard assets, which can be commodities, especially industrial manufactured commodities."
Ganglak said he became neutral on gold months ago and still is.
"the price of gold failed to hold up."
The gold market broke through the $2000 / oz mark in August last year, setting a new all-time high, and then began to fall back. After a sharp fall in November, it rebounded in December, returning to around $1950 an ounce at the beginning of this year, but has fallen back again since then. It is now at around 1840 levels.
Ganglak was bullish on gold last year, but now believes that the price of gold lacks a clear direction.
"in a state of concussion, we will always maintain a neutral attitude towards gold."
Gunrak is also neutral about bitcoin, which soared in price last year.
The price of Bitcoin recently hit a new high above $40000, but similar to gold, there has been a more significant pullback.
"Bitcoin prices fluctuate between $1000 and $2000 a day, which is dangerous for any market. I don't want to worry about losing 20 per cent in an hour."
Ganglak pointed out that the sharp rise in the price of digital currency is mainly due to the entry of institutional investors, "they have exacerbated the market madness."
For the future trend, inflation / deflation will be the theme of the whole market this year. Ganglak believes that investors should be prepared for both deflation and inflation.
"inflation is a big variable. It has been stable. Core CPI has not reached 3 per cent in the past 25 years, but can this state be sustained?" Definitely not. Will we go into deflation because of debt? Or maybe. What about inflation? It's also possible. "
Mr Ganglak believes that some of the portfolio should hedge against deflation, such as cash and bonds. In addition, there are 25% inflation hedging assets, such as stocks. Another 25% are allocated to hard assets, including real estate, gold, commodities, and even bitcoin.
He pointed out that the market will fluctuate greatly this year due to the impact of the epidemic and vaccines. Once the vaccine effect begins to show and the economy begins to grow, it is necessary to distinguish between real economic growth and stimulus-induced growth.
As for the dollar, Ganglak said he was bearish for a long time.
"the dollar is in a long-term downward trend."
He thinks the dollar will eventually fall further because of U. S. debt and deficits.