Cramer suggests adding gold
Mad Money host Jim Cramer is advising investors to invest in gold (IAU) if they’re concerned about the Fed’s interest rate policy and the trade conflict between the US (SPY) (IVV) and China (FXI). Cramer said, “If you’re looking for an insurance policy against volatility and economic uncertainty, gold is a great way to go.” He added, “While I like the stock market here, as you know, now that the Fed has decided to be more patient, the whole point of diversification is to be prepared in case something goes wrong … and your thesis doesn’t pan out.”
Read Bulls versus Bears on Wall Street: Time to Buy Gold in 2019? for major analysts’ take on the gold price outlook in 2019.
What should investors buy?
However, Cramer doesn’t recommend buying the actual metal. Instead, he recommends direct exposure through the SPDR Gold Shares (GLD), which is the largest gold-backed ETF. He thinks that GLD and other gold mining ETFs (GDX) (NUGT) reduce risk and inconvenience. In addition to GLD, Cramer also recommends a high-quality gold producer like Barrick Gold (GOLD). Recently, Barrick Gold and Randgold Resources’ merger was finalized, which canceled Randgold’s London listing.
Barrick-Randgold merger created a mining behemoth
Regarding the Barrick Gold and Randgold Resources merger, Cramer likes the merged company. He said, “The company has the lowest total cash costs among its peers — I like that — [and] it has a nicely diversified portfolio of assets across the world — I love that.”
Read Is Barrick Worth a Look after Its Merger with Randgold? for more details on the new company’s operating metrics and its outlook after the merger.