Reasons why gold is the best investment amid volatility

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As market volatility (^VIX) continues to weigh on investors’ minds, John Petrides of Tocqueville Asset Management shares his investment insights amid the Federal Reserve’s interest rate decision making on today’s episode of Catalysts

Petrides observes that volatility has been “strangely quiet” recently, a situation that appears to have made the Federal Reserve more attentive to market reactions. In light of this environment, Petrides advises investors to buy gold (GC=F), arguing that “there’s way too much uncertainty” in the current market, making gold an attractive option for investors.

Furthermore, with potential Fed rate cuts on the horizon, Petrides believes gold stands to benefit.

For more expert insight and the latest market action, click here to watch this full episode of Catalysts.

This post was written by Angel Smith

Video Transcript

I’m curious if you think that the Fed cares about what the market is doing, given some of the frothiness that we’re seeing and the kind of idea that there’s this unofficial third mandate for them to make sure that there’s not a market crash.

The Fed will definitely say they don’t care what the market thinks.

And I think the fact that volatility has been so quiet, like strangely quiet, the VX is really, really low that the FED is not overly concerned that they’re comfortable with where their language is.

If we saw volatility pick up in the get higher and you see more of a of a sell off in the stock market, I think the Fed would be definitely more market friendly in terms of its language.

So John, how should investors be thinking about positioning then just given so much of that uncertainty, you know, we’ve owned a position in gold for the clients that we managed for a very long time.

We increased it in January of 2023 and we still maintain a high level position of gold for our clients.

We think there’s way too many, too much with the amount of debt the US has on the balance sheet.

Gold typically does well when interest rates come down.

So if the FED is in the process of starting to ease that will benefit gold.

And again, we think the fiscal and the deficit and the debt situation in the US is way too uncertain.

Let’s not forget that geopolitical and political risk globally is a big issue that again, with the VICS being so quiet.

For me, it’s a red flag that, that the market seems overly myopic on just what the fed is doing.