Is a Rapid Pullback in Gold a Great Opportunity to Build Positions? Fund Managers Say It's Much More Reliable Than U.S. Stocks!

This week, gold experienced significant volatility. The gold price on the Shanghai Futures Exchange recorded a weekly decline after seven consecutive weeks of gains, while the international gold price dropped from a historic high of $3,509.9 per ounce on Tuesday to around $3,300 currently.

However, Ryan Mclntyre, managing partner at fund company Sprott, stated that investors should take advantage of this pullback to gradually build a gold position accounting for 10% of their portfolio, as gold still has substantial upside potential in the long term compared to the overvalued stock market.

He pointed out that his fear of the US stock market far exceeds that of gold, and he expects US stocks to continue struggling as inflation remains high, forcing the US Fed to maintain a neutral policy. Eventually, companies will adjust their future earnings expectations to reflect the impact of high interest rates.

He emphasized that over the next decade, gold's returns may not be worse than those of the US stock market, and its risk profile will be much better.

The US dollar is beyond recovery, while gold remains worry-free.

Mclntyre noted that the issues brewing in global financial markets have spread to the sovereign level, which will support gold in 2025.

He believes that the problems faced by the previous generation were largely concentrated in simple corporate issues, but the current generation must deal with sovereign issues, especially those related to the US. Given that the US is the world's largest economy, the risks are much greater than before, and the only solution to such risks is physical gold.

Previously, US President Trump's threats to impose hefty tariffs globally and his attempt to replace Fed Chairman Powell triggered extreme risk-off sentiment in the market, making gold the ultimate safe haven. Although Trump later softened his stance, in Mclntyre's view, the damage had already been done.

He stressed that the US dollar will not lose its reserve currency status overnight, but its usage is declining. He believes countries will either hold more of their own currencies or some more independent currencies, such as gold.

In his view, the 2011 gold price surge pushed gold to a historic high of $1,900 per ounce and sparked a mining boom, with consumers surrounded by overwhelming gold advertisements. However, current interest in gold has not reached that level of frenzy.

This also means that gold prices have not yet peaked. Mclntyre stated that the market will only see a peak when people are convinced that gold cannot go wrong.