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When it comes to buying gold, Ray Dalio's definitely been consistent with his message, telling investors there is no such thing as a wrong entry point for gold. CNBC's Jim Cramer, on the other hand, believes some entry points are better than others, and that August is shaping up to be an optimal one.
Dalio's Bridgewater Associates is not only the world's largest fund, but also the best-performing one. True to Dalio's bottom line, the fund has poured in $400 million into gold in Q2 alone, and much of the fund's outperformance is indeed attributed to its investments in the precious metals sector. And while Dalio has shifted his professional ventures a bit, changing his position in Bridgewater and starting a software company, his view of gold is the usual.
One of gold's most famous proponents, Dalio often advises investors to buy gold whenever and however, and did so in 2019, touting it as an asset that reduces risk and enhances returns. While the metal was already doing well back then, it went on to post a new all-time high of $2,070 last August.
Dalio is also a personal investor in gold, and while he often reiterates the importance of portfolio diversification and makes investments into various sectors, the metal seems to be his favorite choice. More recently, he also brought up inflationary concerns as another reason why new investors might want to consider moving into gold and familiar ones increasing their exposure.
Cramer focuses a lot on the stock and bond markets and points to gold whenever he sees trouble brewing in either of these. Cramer used Larry Williams' seasonal charts, among other things, to highlight why the stock market could underperform and gold outperform in August, even though gold has already had a very good July.
Cramer said that debt ceiling worries are coming to prominence as the two-year suspension of the debt ceiling expired in July. When the same thing happened a decade ago, both the stock market and gold performed in a manner that is exceedingly well-known to investors.
Latest CFTC data shows that commercial hedgers have been buying even more gold as of late, which normally tends to drive prices upwards, along with sending a message. Pointing to Williams' analysis, Cramer notes that gold is extremely undervalued compared to bonds, which some might find staggering given the performance of both over the last year.
With seasonal trends and technicals pointing to an upswing in gold, Cramer believes that August could be a breakout month for gold, and also a great buying opportunity since prices still haven't posted any real explosive action.
At least, not yet.