“Joe Cavatoni: Gold’s Bright Shine, Despite Difficulties Ahead

Gold has long been seen as a safe haven asset, a precious metal that has properties to safeguard investors from market shocks and other global disturbances. In recent times, however, the yellow metal has experienced some challenging headwinds that have kept its performance in check. Despite these issues, Joe Cavatoni, chief investment officer at US Global Investors, remains bullish on gold, particularly as the new Biden administration settles into office. According to Cavatoni, gold is still a key asset for investors and continues to be insulated from economic uncertainty. This, he noted, could be crucial as Washington navigates the “fiscal cliff” that it has created due to previous stimulus packages. He pointed out that gold attitudes have changed over the past few years, with more people viewing it as an inflation hedge. This has driven the gold price up, and will likely help it remain resilient, he said. Cavatoni also noted that the gold market is driven by global diversification. While the U.S. is an important factor in gold demand, there remains strong buying from Asia and other parts of the world. China and India, in particular, are major purchasers of gold in physical form, though the metal is also finding heavy interest in the Middle East and Africa, Cavatoni said. This indicates that gold is likely to remain robust despite current market trends. That said, Cavatoni noted that it’s essential for investors to understand that gold is still subject to headwinds. The yellow metal could face resistance from rising U.S. interest rates, volatility in the oil market and geopolitical tensions. He warned that gold may not be a good choice for those who are risk-averse and who cannot stomach losses. On balance, Joe Cavatoni believes that gold is still a great asset to hold in one’s portfolio, particularly as global economic uncertainty remains. He said that investors should look past current headwinds and focus on the general outlook for the precious metal. By doing so, investors can capitalize on the long-term advantages of owning gold, while being well aware of the potential pitfalls.