The recent dip in gold prices represents a good time to stock up, according to DoubleLine Capital CEO Jeffrey Gundlach, who sees the broader market in a readjustment mode.
"The market, I think, is in a revaluation phase. And I believe that ... it's hard to make money this year," the billionaire investor said Tuesday on CNBC. "It started out that people are making money in foreign markets and in commodities, but while commodities and gold specifically are still up, they're not up very much."
Spot gold traded in the $4,400-an-ounce neighborhood Tuesday and was over $4,500 on Wednesday. It had reached nearly $5,600 in late January.
"We were talking about this in our strategy meetings the last couple of weeks and I was saying, 'You know, I really think for the long haul, I still want to be in commodities and I still want to have a gold position,'" Gundlach said.
"But my enthusiasm for gold was definitely exceeded last year by the market's actual action. ... I talked about gold would go above 4,000 last year, and we talked about that when it was well below 4,000. Well, I was not enthusiastic enough, I guess, because it went up to almost 5,500, but now we're back down at about what I thought would be the target for gold as a high point for the year," Gundlach said.
"But at this level, I think it's a very good opportunity to add to gold and to add to commodities," he said. "I'm not terribly enthusiastic about credit or stocks at this point. I don't think they're cheap enough. I think I would want to see the VIX (volatility index) go higher to signal a real washout on the stock market."
While Gundlach cut DoubleLine's gold holdings early in the year, he said he remained bullish.
"Gold was so wildly overdue for a correction," he said. "I mean, it went it went from 2,000 to 5,500 almost in a straight line and it just got kind of overbelieved, I think, at that height. But I think this is a very good point for buying commodities and gold. I like it a lot better today than I did two weeks ago because I think it's in a bull market and I you've had what's truly a correction."
Turning to interest rates, Gundlach said he doesn't expect the Federal Reserve to hike or cut interest rates at its next meeting, although betting markets see slightly better chances for a hike than a cut. The DoubleLine CEO does see signs that outgoing Fed Chair Jerome Powell, whose term expires in May, will stick around through 2028.
Trump has expressed frustration that Powell's Fed hasn't cut interest rates, and the Justice Department is investigating the Fed chair.
"I mean, Trump is blaming Powell for everything, you know, he calls him 'Too Late Jay' and there might be there is some historical record that justifies that. But he's just doing it far too combatively. And now Jay Powell ... seems to be pushing back," Gundlach said. "He's not a shrinking violet here.
"I mean, he's basically, he's saying inflation's high because of the tariffs and now inflation may stay higher than we would like because of the war. So they're both pointing fingers and blaming each other. And then Jay Powell says, you know, as long as this investigation goes on, I'm not going anywhere. ... He says he hasn't made up his mind what's going to happen after May.
"But if you read between the lines ... sounds to me like he plans on hanging around not as chair obviously but involved at the Fed, which he can do until the end of 2028. I think he's more than happy to be sort of a thorn in the side of of Trump's rhetoric," and that suggests Powell intends to fight any rate cuts that a new Fed chair might want to propose, Gundlach said.
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