De-dollarization means gold is undervalued and has ‘long way to go’, says Bridgewater co-CIO

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  • The Bridgewater co-CIO said is undervalued and could be boosted by de-dollarization.

  • “This geopolitical upheaval is not going away. This is the slow-moving secular support for gold,” said Karen Carniol-Tambor.

  • He said at the Sohan conference on Tuesday that inflation will also maintain interest in gold.

Sleep The continuation of de-dollarization trends could mark the beginning of a sustainable growth period, said Karen Carniol-Tambor, co-CIO of Bridgewater Associates.

Gold has historically been attractive when interest rates are falling, but she thinks there is more to come for the precious metal now, setting it up for a bullish outlook.

“Gold is undervalued. It has a long way to go,” she said at the Sohn conference on Tuesday. According to Kitco News,

It comes as some countries seek to reduce their reliance on the US , which is key in international trade and traditionally seen as the pillar reserve asset for central banks.

But Western sanctions on Russia have frozen its foreign exchange reserves and exposed risks in using the dollar. And since Russia's invasion of Ukraine, more countries have turned to China's yuan or other non-dollar currencies for trade deals.

During this, Central Bank's gold purchases have increased In the last few quarters as they rushed to hoard it in their stores.

Carniol-Tambor said it also has the potential to change investor sentiment around gold, namely its perceived opportunity cost as a non-yielding asset.

“This geopolitical turmoil is not going away,” she said. “It's slow-moving secular support for gold.”

Meanwhile, with inflation still relatively high in global markets, gold continues to attract investors as a hedge against purchasing power erosion.

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Consumer inflation in the US has eased sharply from a high of 9% last June. but the most recent cpi data put inflation at 4.9% for April, still well above the Federal Reserve's target of 2%.

“The fact that inflation is so volatile increases the likelihood that you're going to get some version of a debasement event where you lose your real purchasing power,” Carniol-Tambor said.

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