Bill Gross, the world’s largest bond fund manager and founder of PIMCO, received a significant amount of media attention today after proclaiming that “the cult of equity is dying.”
In his latest monthly Investment Outlook, Gross essentially argued that the long-held view by many investors of stocks for the long run is fatally flawed. Furthermore, he asserted that investors should considerably lower their expectations for the broader financial markets going forward.
However, while Gross’ outlook for equities as a whole was quite cautious, he described an economic environment moving forward that has historically been very favorable for gold prices.
Although Gross did not mention the word gold anywhere in his piece, he contended that investors “Should continue to expect an attempted inflationary solution in almost all developed economies over the next few years and even decades. Financial repression, QEs of all sorts and sizes, and even negative nominal interest rates now experienced in Switzerland and five other Euroland countries may dominate the timescape.”
As GoldAlert has discussed on numerous occasions, further money printing and negative interest rates have been two of the driving forces behind the gold bull market in recent years. If these factors remain and/or intensify, the yellow metal could be headed to a new record high.