"Bond King Jeffrey Gundlach's Gold Advice After the Fed"

Positive Outlook on Commodities from the Bond King

Jeffrey Gundlach, the CEO of DoubleLine Capital, made an important statement for investors closely monitoring movements in the commodities markets. He noted that the Fed has shifted its stance towards commodities in a more positive direction following interest rate cuts. Gundlach expressed that he will continue to focus on foreign investments alongside the weakening dollar.

Strategy Recommendations for Gold

Gundlach emphasized that gold and other commodities had been overlooked for a long time, but currently, there is a stable upward trend. In an interview with CNBC, he stated, “Commodities have begun to quietly rise overall.” He mentioned that as of last week, he has taken a positive view on a broad commodity group, stating that a commodity index is a reasonable investment tool.

Fed's Interest Rate Cuts and Gold Allocation

Gundlach's comments came after the Federal Reserve (Fed) reduced the interest rate by 25 basis points, bringing it down to a range of 3.5 - 3.75. This was the Fed's third interest rate cut in 2023.

Gundlach conveyed that gold still holds a critical position in portfolio management, recommending that 25% of portfolios be allocated to gold in September, but he later lowered this allocation rate at the end of October.

Weakening Dollar and Emerging Markets

The primary reason for Gundlach’s shift towards commodities is the expectation that the dollar will weaken. It is particularly speculated that U.S. President Donald Trump may appoint a more dovish Fed Chair, which would likely lead to lower interest rates. This situation could facilitate a steepening of yields and increase pressure on the dollar.

Gundlach advised investors that they should turn to non-dollar assets, noting that this is supported by the strong performance of fixed-income securities in emerging markets. He stated, “You should increase non-dollar investments. The current situation is just the beginning of a period where these investments perform better than dollar investments.”