So far, under President Donald Trump, the Dow Jones continues to post record highs. But that doesn’t mean the Trump trade is going as smoothly as many believe it is, says Peter Schiff, president and CEO of Euro Pacific Capital.
Speaking in an interview with CNBC, Schiff explained that the Trump rally “has unraveled a bit” in recent weeks. He noted that the U.S. dollar, which was strong at the beginning of the Trump trade, has given up 100 percent of its gains since November. Moreover, Schiff says, when the S&P 500 is priced in gold then it’s really down.
Schiff recommended investors to start piling up on bullion because it “is up more than the Dow and more than the S&P” as the yellow metal has climbed more than 11 percent year-to-date.
He also thinks that it is time for investors to finally start looking overseas for gains.
“The U.S. markets have been pretty steady while foreign markets have been much stronger, [with emerging markets also being very strong,” he said. “I expect this trend to continue and I think it will accelerate in the second half of the year.”
When it comes to the Federal Reserve and interest rates, Schiff doesn’t think any more rate hikes are coming after June. According to the CME Group FedWatch tool, there is a 90 percent chance that the Federal Open Market Committee (FOMC) will pull the trigger on a rate hike on Wednesday.
“Even though the Fed claims to be data-dependent and they hike interest rates [in spite of weaker than anticipated data], I think the markets are starting to look beyond the hikes to the cuts,” said Schiff. “I think we’re getting ready to start a new easing cycle.”
The bestselling author of “Crash Proof” has been sour and bearish on Trump since the election.
Peter is always talking his book. He does not make money if people do not buy gold. Tell those poor folks who purchased gold at $1,850 in 2011, to hold on a little bit longer and they might just break even yet. During the last recession gold lost $400 per oz. Go ahead and buy gold if you want to but it has very little up side and way to much down side for me.