MW Gundlach says gold is no longer for lunatics as the bond king says wait to buy the 30-year

By Barbara Kollmeyer

DoubleLine CEO says India assets are an investment to buy for grandchildren

The direction is pointing south for stocks on Thursday as trade headlines dog investors.

And some big names in finance have been offering advice over the past 24 hours. Howard Marks, co-founder and co-chairman of Oaktree Capital, on Wednesday warned investors to be cautious as uncertainty under President Donald Trump wasn't going away.

There's plenty of wariness in our call of the day from another influential investor, DoubleLine's Chief Executive and Chief Investment Officer Jeffrey Gundlach. He has plenty of ideas on where investors should be as U.S. market uncertainty swirls.

Gundlach noted that markets are behaving "strange" and "differently," in an interview with Bloomberg late Wednesday, noting how the dollar index DXY and Treasury yields fell during the April stock pullback, the opposite of what was seen in S&P 500 SPX corrections in the past 15 years.

"I think what we have is a recognition that the interest expense for the United States is untenable, if we continue running a $2 trillion budget deficit and we continue to have sticky interest rates," he said.

"There's an awareness now that the long-term Treasury bond is not a legitimate flight-to-quality asset. It's not responding to lower interest rates, it's not really responding to an inflation rate, which is now 2.5%," and likely to go higher, he said.

The manager, nicknamed the bond king, said they are "very uninvolved in the long-term [30-year] Treasury bond," because of his belief yields will rise when the U.S. economy starts to weaken or the Fed cuts.

He's waiting for the yield to possibly hit 6%, and trigger quantitative easing. "You could get a 20-point rally on the long bond if they announced they are buying the long bond," he said.

Gundlach said that while the long bond is no longer a flight-to-quality asset, gold is.

"I think of gold as a real asset class. It's no longer for lunatic survivalists and wild speculators," with central banks also buyers.

As for U.S. stocks, he said while the market was "really overvalued" ahead of the April selloff, it's "more overvalued" now because the S&P 500 is lower and earnings estimates have been cut significantly.

What is he expecting? "I anticipate a great buying opportunity. I don't know when it's going to happen, but it's getting close," he said. "The environment feels a lot like 1999 relative to AI is just map over dot-com. I also think it feels a lot like 2006, 2007."

"One of the hardest things to do in the investment business is to learn and fully appreciate how long everything takes to happen. It takes forever for the problems to actually show up, it takes forever for the defaults to finally arrive, but people anticipate change with great enthusiasm," such as what's been seen with AI, he said.

Tech stocks that have been outperforming tied to AI are a "momentum trade," which always tends to overshoot on the upside. "And then once the momentum's broken, the late comers decide that their first loss is their best loss and it turns into a seller's market," he said.

Gundlach said a smart investor will right now be putting money into "long-term themes. And a theme that I think is one of the most bankable, and it might take 30 years, is that you should invest in India because it has a similar profile to where China was 35 years ago," such as a massive population and labor force and is now an economic powerhouse.

Buy India and hold for "your grandchildren's college fund," and then just try to forget it, he said.

U.S. stock futures (ES00) (YM00) (NQ00) are dropping, with Treasury yields BX:TMUBMUSD10Y BX:TMUBMUSD30Y lower. The dollar DXY is down 5% as gold prices (GC00) climb 1%.

   Key asset performance                                                Last       5d      1m     YTD 
   S&P 500                                                              6022.24    0.86%   2.20%  2.39% 
   Nasdaq Composite                                                     19,615.88  0.80%   2.45%  1.58% 
   10-year Treasury                                                     4.418      2.70    -1.70  -15.80 
   Gold                                                                 3395.2     -0.06%  6.74%  28.64% 
   Oil                                                                  67.71      7.92%   7.66%  -5.79% 
   Data: MarketWatch. Treasury yields change expressed in basis points 

The buzz

Weekly jobless claims, and May producer prices are due at 8:30 a.m. A 30-year bond auction is also ahead.

Boeing shares $(BA)$ are down after an Air India passenger plane bound for London with 244 people onboard crashed in Ahmedabad, India.

Oracle stock $(ORCL)$ is gaining after the cloud-services group lifted its 2026 revenue expectations as quarterly sales rose 11%.

GameStop $(GME)$ said it plans to raise $1.75 billion in debt, which could mean the videogame retailer will purchase more bitcoin. Shares are dropping.

Fintech company Chime Financial $(CHYM)$ priced its IPO at $27 a share, above an expected range for its Thursday debut on the Nasdaq.

Voyager Technologies shares $(VOYG)$ continue to gain after a strong NYSE debut for the space technology firm on Wednesday.

Calavo Growers $(CVGW)$ surged after the fresh produce group said it received an unsolicited acquisition proposal for $32 a share.

President Donald Trump said letters will go out to trading partners in the next two weeks setting unilateral tariff rates, before a July 9 deadline.

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Top tickers

These were the most active tickers on MarketWatch as of 6 a.m.:

   Ticker  Security name 
   TSLA    Tesla 
   NVDA    Nvidia 
   GME     GameStop 
   PLTR    Palantir Technologies 
   BA      Boeing 
   AAPL    Apple 
   TSM     Taiwan Semiconductor Manufacturing 
   AMD     Advanced Micro Devices 
   AMZN    Amazon 
   ORCL    Oracle 

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-Barbara Kollmeyer

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June 12, 2025 06:56 ET (10:56 GMT)

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