Greenlight Capital’s David Einhorn is betting big on gold, expecting the Federal Reserve to cut interest rates more than what’s anticipated, as Kevin Warsh, President Donald Trump’s pick to succeed Jerome Powell as Fed chair, might persuade the committee to cut rates if inflation is lower than the 4%-5% level.
The non-ferrous metal, in addition to being a proven inflation hedge, has become a popular asset amid geopolitical tensions and an unstable trade policy. Einhorn, who became popular after his bet against Lehman Brothers during the 2008 crisis, stated that gold has become a “reserve asset” for central banks worldwide because they seek something more stable than the U.S. dollar. He also believes there may be issues affecting the major currencies “sometime over the next number of years.”
