Gundlach Sees Gold Hitting $1,400
New York (Reuters) – Jeffrey Gundlach, co-founder and chief executive officer of DoubleLine Capital, said on Thursday that gold prices are likely to reach $1,400 an ounce as investors lose faith in central banks.
"The evidence that negative rates are harmful and not helpful has piled up to the point that the 'in central banks we trust' mantra has finally been laid bare as a hoax," Gundlach said.
New York (Reuters) – Jeffrey Gundlach, co-founder and chief executive officer of DoubleLine Capital, said on Thursday that gold prices are likely to reach $1,400 an ounce as investors lose faith in central banks.
"The evidence that negative rates are harmful and not helpful has piled up to the point that the 'in central banks we trust' mantra has finally been laid bare as a hoax," Gundlach said.
Federal Reserve Chair Janet Yellen suggested the U.S. Central Bank could turn to negative interest rates in an economic downturn despite legal and other uncertainties.
Central banks in Europe and Japan have turned to the once-radical idea of negative interest rates to spur their moribund economies.
Gundlach said negative rates are highly correlated with equities, particularly with banks and financials. Their stocks have come under severe selling pressure as negative rates hurt their balance sheets.
"The Fed raising rates in this environment is unthinkable," Gundlach said.
Gundlach also told Reuters that he purchased more Puerto Rico general obligation bonds at around 70 cents on the dollar.
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