Gold stocks are on a tear. So much so that one analyst believes that they are about to become the next FAANG stocks, the latter of which represent high-flying tech companies that have been fueling much of the stock market’s gains lately.
On CNBC, Wolfe Research Technical Analyst John Roque touts what he calls the BAANG stocks, which are a group of five gold companies that together have advanced more than 40 percent since May. These companies include Barrick Gold, AngloGold Ashanti, Agnico Eagle Mines, Franco Nevada, and Gold Fields. And while investors may be flocking to these gold names lately, don’t be surprised if they are also “hodling” some digital gold – bitcoin – whether they admit it or not.
CCN previously reported that Bridgewater Associates Co-CIO Ray Dalio provided a bullish outlook for gold, describing a “paradigm shift” in which the No. 1 precious metal would be used to diversify investment portfolios in an environment of persistently low interest rates. In fact, this scenario has played out lately, with the price of gold up by a double-digit percentage year-to-date and hovering at $1,427 while bond yields remain low.
In his argument for gold, Dalio recently wrote that while many expect “the best risky investments will continue to be equity and equity-like investments,” he disagrees.
“I think these are unlikely to be good real returning investments and that those that will most likely do best will be those that do well when the value of money is being depreciated and domestic and international conflicts are significant.”
While Dalio says he’s talking about gold, he could make the very same argument for another store of value – bitcoin.
While it’s true bitcoin has proven to trade on good news once again in 2019, we have yet to see one person move the market significantly. Ray Dalio could be the one to do it.
Travis Kling, who is the founder of Ikigai Asset Management, suggests that you might have to read between the lines with Dalio’s analysis. There are several gems in Kling’s hypothesis, not the least of which is that “you can’t be that smart and hold that view and not be bullish BTC. ” The asset manager also points to the influence that Dalio has on the market, saying that if the gold bug were to admit that he owns bitcoin, “price would be at an ATH next week.”
With or without Dalio’s blessing, the technical and fundamental signs remain bullish for bitcoin and could send the leading cryptocurrency to a fresh 2019 high soon.
Last modified: January 10, 2020 3:32 PM