What’s the smarter move right now, buying gold or selling gold?
Most of the smart money is in the selling mode. Last week, hedge fund billionaire Stanley Druckenmiller said that he sold all of his gold just before the election because all the reasons for owning it “may be ending.”
Wall Street is anticipating a boom in the economy and markets due to the new administration’s infrastructure spending plans and its desire to rid the economy of what it sees as excessive regulation. That would diminish gold’s role as a safe haven for those fearing a decline in equity prices.
On the other hand, the new spending programs could raise the specter of inflation, which theoretically would make gold more valuable in its role as a traditional inflation hedge. But many of the same analysts who see a rising equity market also believe that there is plenty of room for economic growth before we have to start worrying about inflation – making gold equally undesirable at the moment based on its inflation hedging properties.