If there is any consensus on what has been an interesting week for markets, it’s that bonds are likely to recover. In what appears to be a good time to buy, many leaders from the Fed and from the market have warned against dumping bonds too quickly, as rising yields could have simply been an overreaction.
Jeffrey Gundlach joins Pimco’s Bill Gross in telling investors that bonds are still a good bet, noting that the yield fell six basis points on Thursday, returning to 2.475 percent after a startling spike to 2.66 percent last week. Attempting to calm investors during his webcast, he said, “I do think the worst is over. Now we have corroborative evidence from the markets.”
He furthered his argument for treasuries by comparing them to gold, which has plummeted recently. Gold hit a three-year low this morning when it dipped below $1,200 an ounce. “Gold looks like death,” he said.