In a recent interview by Commodity Culture, insights were shared by Jesse Felder, a veteran of the finance industry, former hedge fund manager, and founder of Felder Investment Research. The interview delved into a wide range of topics, including the current state of the markets, the outlook for precious metals, and opportunities in the oil and gas sector.
"I've been bullish on the precious metals for almost the past 10 years," Felder stated in the interview. He pointed to a significant market bottom in the 2015 timeframe, when bearishness on precious metals was at an all-time high, as evidence of the current secular bull market.
While acknowledging that gold may be in a short-term consolidation phase, Felder emphasized, "I don't think investors have really embraced precious metals anywhere near in the way that they will by the time the bull market is over." He further highlighted the underperformance of gold miners relative to gold as a bullish sign, stating, "I think if you look back to like other periods where the with the you know the metal sword look at 2016 and the miners let you know had a huge year relative to the S&P 500 that's more typical of what you would expect to see when you see the underlying Metals move so strongly miners typically outperform and the fact that they've underperformed to me as is a very is one of the most bullish I think signs within that precious metal space that you could hope for."
Felder also discussed the impact of the Federal Reserve's monetary policy on precious metals. He believes the recent rate-cutting cycle could further fuel the bull market, although he cautioned that sentiment towards precious metals may need to cool further before the next leg up.
Beyond precious metals, Felder expressed optimism about the oil and gas sector, despite the current bearish sentiment. He highlighted the strong demand for energy and the potential for a weakening U.S. dollar as key drivers for the sector's future growth.
"I think there's opportunity in the sector right now," Felder said. "It's had a terrible month the energy stocks have just gotten crunched this month I think the sentiment is far too bearish in the space and I think you know one of my favorite ways to kind of value Commodities is relative to each other and it's one of the things that makes me relatively cautious on gold if you just look at the Gold to oil ratio you know it's on the highend kind of of of that of its history over the last I don't know 15 20 years that would suggest gold is relatively overvalued or oil is relatively undervalued relative to the gold price and that you know I think can be helpful in understanding okay which what you know what do I want to favor right now and I think that points to favoring these energy stocks and favoring the oil price right now."
The interview also touched upon the geopolitical landscape, with Felder emphasizing the significant shift away from globalization and its potential impact on asset prices. He argued that this shift could lead to higher inflation and headwinds for corporate profits, while also creating opportunities for certain sectors, such as domestic manufacturing and energy production.
"What we're realizing is that globalization didn't have the kind of geopolitical effects that people believed it would and now they're now we're realizing that you know it's problematic in terms of National Security if we've offshored production to a lot of these countries that don't believe in democratic values and don't necessarily want to be our friends and allies," Felder stated.
Watch the full interview:
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