Oct 11, 2023

The price of gold is back on investors’ minds after a Fed-driven slump as the Middle East adds another war to the current Ukraine-Russia conflict.

XAUUSD: Daily Chart

Gold touched support earlier this year at around $1,820 and has since rallied to the $1,860 level. The first level for gold would be the previous support level of around $1,900. That could open up the door to a retest of the $2,000 mark.

Legendary hedge fund manager Paul Tudor Jones said on Tuesday that it is tough to be a stock investor in the US due to geopolitical tensions and the dire fiscal position in the US.

“It’s a really challenging time to want to be an equity investor in US stocks right now,” Jones said on CNBC.

“You’ve got geopolitical uncertainty. The United States is probably in its weakest fiscal position since World War II, with debt-to-GDP at 122%”, he added.

Tudor Jones is also negative about the corporate economy, saying “as interest costs go up in the United States, you get in this vicious circle, where higher interest rates cause higher funding costs, cause higher debt issuance, which cause further bond liquidation, which cause higher rates, which put us in an untenable fiscal position”. 

The iconic investor also said what many are thinking: that there is a risk of a global conflict, saying there are now three potential major flashpoints: 1) the Ukraine war, 2) the Israel war, and 3) potentially China and Taiwan, and “where this really gets bad is obviously if Iran and Israel get into direct conflict because then you’ve got the ability to have kind of a First World War cascade, where everyone gets involved”. 

Many are taking an optimistic tone in the early stages, but this could end up being a long-term low in gold prices.

Jones said that “it’s hard to like stocks” and that he “likes bitcoin and likes gold”.

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