“Right now, the No. 1 thing is quantitative easing,” Lydon says. It’s on the table probably either way whether or not a deal is reached on the fiscal cliff. Additional monetary stimulus from the Federal Reserve would foster more concern over dollar debasement and likely provide a tailwind for gold ETFs such as SPDR Gold Shares (GLD).
The precious metal is seen as a way to protect purchasing power, Lydon explains. [10 Things to Know About Gold ETFs]
”I think gold probably has more things going for it than not at this point,” he told Yahoo Finance’s Breakout. “We’re all asking, ‘what do I do?’ but there are a lot of investors out there who haven’t invested in gold, who haven’t diversified yet. I think they’re going to step forward and say, if ‘I haven’t done it, maybe now is a good time to do it.’”
Lydon also discusses why he likes miner ETFs such as Market Vector Gold Miners ETF (GDX). “Right now gold miners really are a value bet,” he concludes.
Watch the Breakout video to see the full interview.
Full disclosure: Tom Lydon’s clients own GLD.
The opinions and forecasts expressed herein are solely those of John Spence, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.