Reassessing Gold Investments: A Shift from Bullish to Cautious

As a finance expert, I summarize the article as follows: The author of Successful Portfolio Strategy was previously bullish on gold and gold miners, holding over 30% of their portfolio in these assets. However, they are now taking profits due to large capital gains, citing that gold is no longer a safe investment.

Gold prices surged past the $3,400/oz threshold on Monday, marking the seventh consecutive session of gains for the front-month contract. This rally was driven by escalating rhetoric from President Trump regarding the Federal Reserve Chair Jerome Powell and the ongoing U.S.-China trade tensions. White House economic adviser Kevin Hassett hinted that Trump's team was studying whether Powell could be fired, while Trump himself called for lower interest rates. These statements led to a stock market rout, with the Dow industrials falling nearly 1,000 points and the dollar hitting decade-low levels against major currencies [1].

The uncertainty surrounding the Fed's independence has further fueled demand for gold, with Peter Cardillo of Spartan Capital Securities predicting that gold prices could reach $5,000/oz if the Fed's credibility is called into question. This could lead to a further erosion of confidence in the dollar and accelerate flows into gold as a safe haven [1].

In addition to the political turmoil, geopolitical tensions continue to impact the gold market. China's warnings against striking deals with the U.S. at the expense of Chinese interests have added to the overall uncertainty. Front-month Comex gold (XAUUSD:CUR) for April delivery closed at $3,406.20/oz, up 2.9% for the day, while silver (XAGUSD:CUR) edged higher by 0.2% to $32.496/oz [1].

Investors have also been pouring into gold ETFs, with flows reaching their highest level since March 2023, according to Bloomberg Intelligence. This increase in demand for gold ETFs has been driven by concerns over a global trade war and the lack of policy clarity from Washington [1].

While gold prices have soared, the author of "Successful Portfolio Strategy" has taken a more cautious stance, citing large capital gains and the fact that gold is no longer seen as a safe investment. The author previously held over 30% of their portfolio in gold and gold miners but has since taken profits, suggesting a shift in the market sentiment [2].

References:
[1] https://seekingalpha.com/news/4432997-gold-soars-past-3400-as-dollar-slides-trumps-threats-to-fed-spark-new-safe-haven-rush
[2] https://investingnews.com/daily/resource-investing/precious-metals-investing/gold-investing/tax-on-gold-silver-investments/