2 Reasons Gold Is Set for Another Run Higher

Gold last traded at $1,736 an ounce. Silver at $26.01 an ounce.

NEWS SUMMARY: Precious metal prices eased back Thursday as rising interest rates boosted the dollar. U.S. stocks fell led by technology shares as a spike in bond yields fueled fears of lofty equity valuations.

Carr/Money & Markets--"Gold creates emotional reactions for many investors. Some believe gold is important to their financial security....and can help diversify a portfolio. Another reason to consider gold right now is an inflation hedge.

DoubleLine CEO Jeffrey Gundlach recently told investors that inflation will be above 3% within months. Gundlach is worth listening to since investors have entrusted over $141 billion to him. He said:

'The Fed chooses to be unconcerned about a period of time with inflation running above 3%,' 'In my opinion, not only are they unconcerned, they welcome inflation being higher than interest rates. They like negative interest rates because they know that negative interest rates help to forestall the incredible deficit and unfunded liability problems the United States has. One could actually plausibly predict that headline CPI could go over 4% at some point in about four months from now.'

Gundlach is right that inflation is set to rise based solely on the economy being weak last year. This news could spook investors into buying gold. My colleagues Adam O'Dell and Charles Sizemore are both bullish on the future of gold."