David Einhorn, the head of Greenlight Capital, reaffirmed his bullish stance on Gold at the Sohn Investment Forum in New York on Wednesday, stating that this round of Precious Metals rally is far from over.
According to Zhitong Finance APP, David Einhorn, the head of Greenlight Capital, reiterated his bullish stance on Gold at the Sohn Investment Forum in New York on Wednesday, asserting that this round of Precious Metals rally is far from over. The hedge fund manager, known for shorting Lehman Brothers, emphasized that Gold is becoming the "ultimate benchmark" for measuring the credibility of the USD credit system.
Since the beginning of the year, spot Gold prices have soared over 20%, with most of the increase coming in the first quarter. Greenlight Capital, managed by Einhorn, achieved a positive return of 8.2% in the first quarter thanks to precise positioning, while the S&P 500 Index plunged over 4% during the same period. "Defensive asset allocation and bullish positions in Gold are the key winning factors," he admitted in his speech.
This hedge fund mogul's obsession with Gold began during the 2008 financial crisis. He pointed out that the current expansionary fiscal and monetary policies in the USA are pushing the economy toward a dangerous situation: "The bipartisan consensus on debt issues is concerning—no one will genuinely push for reform unless a new crisis breaks out." Einhorn particularly criticized the so-called "government efficiency department"'s austerity plan as mere theatrics, stating, "Compared to the federal budget size, those proposed cuts are hardly even a rounding error."
It is noteworthy that Einhorn clearly separates Gold from the inflation Trade. He disclosed that he also holds long-term inflation swap contracts, betting that the pace of price increases will continue to exceed market expectations. "All unconventional policies will eventually push inflation upward, and this script is already playing out," he warned, stating that Gold's monetary attributes make it a natural tool for hedging against currency depreciation.
While announcing new investments in a German chemical company, Einhorn emphasized that his defensive investment portfolio comprises three pillars: Gold positions, inflation hedging tools, and shorting overvalued asset bubbles.
This configuration approach has allowed him to break through against the trend during recent market turbulence, reflecting institutional investors' vigilance regarding macro risks. As the Federal Reserve's balance sheet reduction process encounters obstacles and the fiscal deficit continues to expand, Gold's appeal as a safe haven may continue to shine.
