As a rule of thumb, whenever gold prices start soaring, investors should mitigate their exposure to the consumer discretionary sector. At its core, gold is a simple commodity — yes, it’s rare and valuable and offers myriad uses. But it generates no earnings nor pays any dividends. If the news cycle is talking about the yellow metal nonstop, it probably means anxiety has gripped the economy.
Frankly, that’s the best way to describe the current juncture. Without getting into the politics, I think we can all agree that the Trump administration tariffs have unsettled global markets and commerce. Again, without getting into the merits of the high-level actions, it’s reasonable to assume that consumer discretionary businesses like Carnival (CCL) are suspect in this environment.
