Tags: RC Peck | Gold | Price | Tumble

Financial Adviser Peck to Moneynews: Gold Isn’t Likely to Plunge Again

Tuesday, 23 Apr 2013 04:02 PM

By Dan Weil and Kathleen Walter

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The intense selling that recently took gold down to a two-year low isn’t likely to happen again, says R.C. Peck, CEO of Fearless Wealth, a financial-advisory firm.

Fundamentals haven’t changed, he tells Newsmax TV in an exclusive interview. “It’s not as if countries are cleaning up their balance sheets and interest rates are being raised.”

The gold plunge “was a very violent and outlier type of move,” Peck says. “So I don’t know if we should expect another one of those.”

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And how should investors approach gold now?

“I don’t think anyone should ever trade a bull market, and I do believe gold is in a secular bull market,” he says. “Every secular gold bull market that’s ever happened has a cleanout period, and this is our second cleanout period. This should be expected.”

Editor's Note: Get David Skarica's Gold Stock Adviser — Click Here Now!

Meanwhile, the stock market’s ascent isn’t based on fundamentals, Peck says.

“The market is not going up because of fundamentals,” he says. “It’s not going up because of great value. It’s going up because people are looking around and going, I don’t know where to put my money.”

Investors aren’t so eager to put money in stocks, but bonds scare them, and commodities have fallen 15 percent over the last two years, Peck says.

“If anyone was thinking about putting money into precious metals and they just saw what happened, that scared them. So they’re looking at what’s going up. They see the stock market going up. They’re going in because they feel they have to.”

That means they’re investing without conviction, which could spell trouble, Peck says. “When anyone buys something without conviction, if it moves against them, it’s going to move hard to the downside.”

He’s not that surprised to see stocks rising while much of the economy struggles. “People like to think that the economy and the market are correlated or highly correlated,” Peck says. “Actually, there’s not that much correlation between the two.”

As for the Federal Reserve, his guess is that it will keep its easing in place for another three years. And what of the recent comments from some Fed policymakers that they would like to see a beginning of a pullback in quantitative easing this year?

“I have this little personal theory that they float out these comments just to see how the market will react to them,” Peck says.

“The economy has been improving over the last four years. During that time period, the government’s run a total cumulative deficit of about $7 trillion, and there’s been about $3 trillion printed.”

That means the economic growth during that period has cost about $10 trillion, Peck says. “So it’s hard to imagine that the Fed is going to stop printing money and stop keeping rates low.”

Editor's Note: Get David Skarica's Gold Stock Adviser — Click Here Now!

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