“How would you advise an institution on precious metals exposure here? How do you view the precious metals space relative to years past?

That was one of the questions posed to Hedgeye’s Director of Capital Allocation David Salem during the Q&A portion of The Macro Show this morning. Salem provides a thoughtful response to the subscriber’s question.

“People look at it differently,” Salem explains. “I’ve always looked at Gold as a kind of dual-purpose hedge. It can be a hedge against hyperinflation at one extreme, and it can be a hedge—and historically it has been—against extended deflations on the other. Most of the middle has not been an attractive environment for Gold relative to everything else.”

“Where we’ve been for essentially the majority of my career, with some exceptions, is that very attractive middle where you haven’t needed a hedge against hyperinflation, and you haven’t needed one against an extended deflation, as distinct from disinflation.”

“Now I think the tide has turned…”

Click above to watch Salem’s full answer.

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