By Jonnelle Marte
The metal’s hit another record high. Robert Wiedemer is still buying.
The stock market closed down more than 500 points. Gold, on the other hand, set another record high, at $1,790 an ounce. It’s a quandary for investors: Many of the metal’s biggest gains are in the past. But with the uncertainty in the markets, maybe there’s more to come?
Quite a bit more, says Robert Wiedemer, managing director of Absolute Investment Management, a wealth management firm in Bethesda, Md. He continues to add to his clients’ exposure to the yellow metal. Wiedemer says he expects gold to post more gains throughout the year and to do so again next year, as long as investors continue to see the metal as an antidote to market volatility and a safeguard against long term inflation.
Another sign the gold run might continue: Yesterday Federal Reserve officials hinted they would consider additional measures to help spur the economy. If those measures involve printing money and buying Treasurys think “QE3″ — those steps could contribute to long-term inflation concerns, says Wiedemer.
To be sure, not everyone is as bullish on gold. Some advisers are using the new price highs to take some profits and buy beaten-down stocks. Meanwhile, Wiedemer, who has raised clients’ allocations to precious metals to 22% in the last few weeks, is using exchange traded funds like the SPDR Gold Trust (GLD) and Sprott Physical Gold Trust (PHYS) to access gold, and using the iShares Silver Trust fund (SLV) to hold some silver. “I don’t have a ton of faith in the stock market,” he says, and he means it: He has only about 10% of clients’ assets in stocks right now.