Gold prices sold off from their all-time highs in late 2020 but still ended the year higher by around 25%. The commodity should continue its upward trend in the new year and investors looking for “insurance” against market downside should consider a stake in gold miner Barrick Gold Corp (NYSE: GOLD), according to Again Capital’s John Kilduff.
Bullish on gold
The first few weeks of 2021 could see new stimulus measures and extended unemployment benefits — followed by more stimulus measures “by the boatload,” Kilduff said on CNBC’s “Fast Money” on Dec. 31. These government measures “can only help gold” as the commodity is known to rise amid heavy government spending that by default lowers the value of the U.S. dollar.
Specifically, the U.S. dollar was down more than 10% in 2020 and will be “under assault” from government spending, he said. But the government has “no choice” but to spend to support the U.S. economy and help U.S. citizens.
Gold might be old fashioned, or “your father’s bitcoin,” but the commodity will nevertheless rise in this environment.
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Buy Barrick instead
Yet investors may want to forego investing in the physical gold commodity and buy shares of Barrick instead, Kilduff said. Specifically, the gold miner offers investors exposure to both gold and copper.
“Both of those things are going to be pumped up by a weakening dollar we are already seeing,” he said.
As such, Barrick offers investors a “great place to hide out” and offers protection against a potential downside move in the market.
