In a compelling interview on the Soar Financially, veteran market strategist Ed Yardeni presented a nuanced outlook on the current economic landscape. While cautioning about geopolitical chaos fueling a gold rally, Yardeni offered a more optimistic view on the stock market’s recent bottom.
Yardeni, the president of Yardeni Research and a familiar voice on financial news outlets, didn’t shy away from describing the present global scenario as a “new world disorder.” This assessment, highlighted early in the Soar Financially discussion with host Kai Hoffen, underscores the significant uncertainties stemming from geopolitical tensions and evolving international relationships.
Gold as a Hedge Against Chaos
A central theme of Yardeni’s analysis was the role of gold as a safe-haven asset in these turbulent times. Referencing the surge in gold prices, Yardeni stated, “I think the price of gold says it all. People are kind of saying, well, if I don’t trust the Americans to keep the old world order going on… it doesn’t look very orderly.”
He pointed to the freezing of Russian assets following the Ukraine invasion as a catalyst for central banks in countries with strained relations with the US to accumulate gold. “Central banks of countries that don’t like us, don’t agree with us, are threatened by us, like China, like Russia, like Venezuela, like Iran, and now maybe some others have been loading up on gold,” Yardeni explained.
While acknowledging his historical lack of focus on gold, Yardeni revealed a shift in his perspective. “I’ve gone where Ed Yardeni has never gone before,” he quipped, referencing Star Trek. Based on his “amateur technical approach” combined with the fundamental insight of increased central bank buying, Yardeni presented potential price targets for gold, emphasizing they were “targets” and not “forecasts.” He suggested the possibility of gold reaching $4,000 by the end of the year and $5,000 by the end of 2026.
However, Yardeni also cautioned about potential corrections, noting, “Usually when something goes up like that… It’s going to go down. So there could certainly be some correction.”
Despite the concerns driving the gold rally, Yardeni offered a more positive outlook for the stock market. Echoing his earlier sentiment from the initial part of the interview, he reiterated his belief that the market had likely found a bottom on April 8th.
“I’m good at calling bottoms on the S&P 500,” Yardeni asserted. He even humorously mentioned a relative who tends to call him at market bottoms, suggesting that another call might signal a further confirmation of the low. “Maybe we have to double test the April 8th low, and maybe he’ll call me. I hope he calls me.”
Yardeni’s perspective suggests a divergence where geopolitical anxieties are boosting gold, while underlying economic factors might be stabilizing the stock market after recent volatility.
Despite acknowledging the “kakami policies” emanating from Washington, Yardeni expressed optimism about the underlying strength of the US economy. “America still is a very entrepreneurial economy. We have an exceptional capital market. Lots of money is available for venture capital for innovation. We have an exceptional banking system,” he stated.
He even recalled his earlier forecast of a “roaring 2020s,” hoping that the current challenges are merely an “interruption” and that the positive trends will re-emerge within the next 6 to 12 months.
Dollar’s Future and Portfolio Strategy
While bullish on gold as a hedge, Yardeni remained optimistic about the US dollar’s long-term prospects. “I wouldn’t give up on the dollar,” he affirmed. However, he advised investors to consider holding some gold as a buffer against the prevailing uncertainties. “I’m telling people, you may want to have some gold in your portfolio as an offset to all the craziness. Gold is a very good hedge against chaos.”
Ed Yardeni’s appearance on Soar Financially provided a compelling snapshot of the current market dynamics. His analysis highlights the interplay between geopolitical instability, the allure of gold as a haven, and the potential for a stabilizing stock market. While the “new world disorder” presents significant challenges, Yardeni’s insights offer a framework for understanding these complex forces and navigating the investment landscape in 2025.
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