Tags: Kate Warne | Gold | Safe | Haven

Investment Strategist Warne: Gold Isn’t Much of a Safe-Haven Trade Right Now

Friday, 19 Apr 2013 11:48 AM

By Glenn J. Kalinoski and David Nelson

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Investment strategist Kate Warne is telling clients not to put too much money into gold, if any, in the aftermath of the huge sell-off in the precious metal.

“We don’t think gold is much of a safe haven trade,” Warne told Newsmax TV in an exclusive interview.

“The reason is basically what you’ve seen over the last week or so, that it tends to move much more with other equity investments, with other stocks. It’s very correlated up and down.”

Watch our exclusive video. Story continues below.

Editor's Note: A full, unedited version of this interview is available exclusively to Financial Braintrust Alliance subscribers. Visit www.fbtalliance.com for more information and to sign up.

The metal plunged 13 percent in two sessions through last Monday, the biggest slump since 1980, according to Bloomberg News. Gold futures on Tuesday slid to $1,321.50, the lowest since January 2011 amid concern that central banks in Europe will sell holdings to pay debt.

Near midday Friday, gold futures rebounded to above $1,4000 as demand for jewels and coins surged, Bloomberg News reported.

“When you think about gold, there’s no income, there’s no way to value [it, except] based on what somebody else is going to pay, and so we don’t think it plays a big role in a long-term investor’s portfolio.” said Warne, an investment strategist at Edward Jones.

Editor’s Note: Put the World’s Top Financial Minds to Work for You

Warne was asked how an investor would know if a short-term correctional pull back isn’t going to turn into something much larger.

“You never do … and that’s why everybody gets so nervous even in a short-term pull back,” Warne said.

Meanwhile, she also was optimistic that government officials will eventually lift the debt ceiling.

“With the tax increases we saw at the beginning of the year, the government’s actually taking a little more tax revenue in than anybody expected,” Warne said.

“Everyone thinks we’ll actually have to raise the debt ceiling sometime during the summer or in the early fall," she said.

"My guess would be … is that they actually work something out so it’s not like August of 2011 where we had such a big controversy and a deadline and that focus on the debt and the deficit," she said.

"The difference is that both political sides … have really concluded that it’s in neither of their best interest to focus the public so much on the fact that Washington can’t get anything done.”

Editor’s Note: Put the World’s Top Financial Minds to Work for You

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