Key Points
Renowned investor John Paulson predicts gold could reach $5,000 by 2028, citing continued momentum following a 25% rise in both 2023 and year-to-date 2024.
Key drivers of gold’s surge include central bank accumulation, rising retail demand, and macroeconomic uncertainty prompting flight-to-safety behavior.
Accessible investment options for gold exposure include the SPDR Gold Trust (NYSEARCA: GLD), Newmont Corporation (NYSE: NEM), and Barrick Gold Corporation (NYSE: GOLD).
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Transcript:
[00:00:04] Doug McIntyre: Alright. You and I know that there’s one very big time investor. I would describe him as a top 10 investor in the United States who bet on a medal over and over and over again, like pounding his head against a brick wall.
[00:00:20] Doug McIntyre: What happened?
[00:00:21] Lee Jackson: Well, I’ve always admired some of the, the great minds because Wall Street tends to, it is like, it is like a bull charge in Spain. they all run down the same road and there’s people getting mauled in the way. But John Paulson, who I think is one of the smartest guys that I’ve seen in the last 40 or 50 years, I’ve been in the business over 30.
[00:00:47] Lee Jackson: he came out recently and said he sees the price of gold going to $5,000 by 2028. I thought that was interesting because Paulson was the guy that made the huge, huge mortgage call back in oh seven and oh eight. And he was short the CDS, the credit, and he was short mortgages.
[00:01:11] Lee Jackson: He and, long credit default swaps and, and just made a FA fortune, so I, I always find it interesting when a guy like Paulson, I mean, it’s, it’s, it’s interesting because Warren Buffet, owns zero Gold and thinks there’s no value in it, a as a commodity, but. Paulson throwing up 5,000 when it’s already up.
[00:01:33] Lee Jackson: Huge. It’s, it was up 25% last year. Gold was spot gold and it’s up another 25% this year and it’s trading, close to $3,300.
[00:01:42] Doug McIntyre: Yeah, I’m looking right now. Gold’s at gold is at 32, 37, so Right. He’s saying it, he’s saying from there it goes to 5,000 and, and as you said, right now, I’m just having a quick look while we’re talking, trying to see where, where do we go here?
[00:02:04] Doug McIntyre: Okay, so year to date Gold has gone from $2,500 right where it is right now, which is almost $3,300. He’s, he’s fundamentally saying that you’ll get that type of growth now over the next several years.
[00:02:23] Lee Jackson: Yeah. And it was funny because gold traded sideways through most of the, the teens, after, I mean, it spiked during the mortgage crisis and it kind of got leveled off.
[00:02:35] Lee Jackson: But, this recent surge in gold is not just a function of central bank buying, but it’s a function of, of, although that’s a large part of it, but it’s also a function of, there’s been a huge retail, I, I know people, well, I, I guess the best way to describe it’s, they were selling gold bars at Costco (NASDAQ: COST). Okay.
[00:03:02] Lee Jackson: So I remember. I remember. I think that’s the easiest. Or, or Walmart or wherever they, Adam. Yeah. But, well, the
[00:03:09] Doug McIntyre: people were interested, GLD. if, if you want to be in, I think they, they own physical gold, don’t they? No.
[00:03:16] Lee Jackson: G-L-D-I-I, if you really just wanna own physical gold, that’s the way to do it because their price is equal to one 10th of, I believe, of the spot price of gold.
[00:03:27] Lee Jackson: So if GLDs, it should be trading in the three 30 ballpark or something like that if gold’s up there. But yeah, that’s a good way to do it. the only other way that you can really do it is to buy the big miners, some of which are hedged and some are not hedged. and you can buy Newmont, which is symbol, NEM, and you can, you can buy Barrick, which is symbol GOLD.
[00:03:51] Lee Jackson: So those are the ways to play it. But Paulson’s call is huge and, and, and like you just referenced, it will go up equivalently another 25% for the next couple of years. So even if you’re late to the party, you could probably still do well if he’s correct. Of course.
[00:04:08] Doug McIntyre: How much of the increases of flight to safety,
[00:04:13] Lee Jackson: I think that’s part of it.
[00:04:14] Lee Jackson: I, I mean, we’ve written about this for years that it is always, and when the market was really getting smoked, after that big, quick sell off. I mean, we went into bear market territory, 20% decline, like four weeks. It was, it was one of the most high velocity sell offs ever.
[00:04:31] Lee Jackson: And I think it got a big boost through that. But again, central bank buying, as a hedge on their currencies is a lot of it. And, and just sheer demand, I guess.
[00:04:41] Doug McIntyre: Well, the other thing is, is that you, do you adopt the theory? Having gold is better than paper money if society sort of, goes to hell.
[00:04:52] Doug McIntyre: And I often say to myself, well, if somebody comes to my house and wants something from me, sort of at the end of days I want food. Okay. Right. There’s, I always wonder when people are talking about a catastrophic end of civilization, everybody says, well, I want to have gold. I’m gonna buy gold and put it in my basement.
[00:05:16] Doug McIntyre: Is it really gonna be great to own gold if things get, if the world goes to hell?
[00:05:23] Lee Jackson: I don’t know. I, yeah, in a doomsday scenario, I think I’d rather have denting more beef stew and a can in my closet, which is what I do have in there. We keep a fair amount of that, but yeah, I can’t see if it’s a, a really, really bad world, if somebody shows up with a, with a gold bar, what that’s gonna do.
[00:05:42] Lee Jackson: But I don’t know. I, I’ve heard people put out the, I, I guess it’s the, the doomsday trading scenarios is they, and I’ve had people suggest, keep ones and fives because you’re gonna wanna buy stuff out on the street, but maybe people won’t be able to break a big bill and they’ll only take a one or a five.
[00:06:04] Lee Jackson: And I’m like, okay, well maybe that’s
[00:06:06] Doug McIntyre: alright. There’s a theory.
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