'Meme Asset': Gold Buyers Should Wait For Now, Says Bill Gross — Here's Why

Bond market veteran Bill Gross compared gold, whose prices have recently skyrocketed, to a "meme asset" that should be avoided for now. He recommended investors to wait for a while before opting for the precious metal.

The Pimco cofounder's warning came on Friday, on a day when gold dipped by 2% after hitting a record high of $4,300 an ounce in the US spot market.

"Gold has become a momentum/meme asset. If you want to own it, wait awhile," he posted on social media platform X.

Gross' view comes in the backdrop of analysts linking gold's recent surge to an expectation that several governments across the globe will let inflation run hot to ease debt burdens.

This rally is considered a part of a debasement trade, as investors flee traditional currencies like the dollar over concerns about soaring debt in the US and other developed nations.

The fears of systemic risks emerged on Thursday, after JPMorgan CEO Jamie Dimon described the collapse of auto lender Tricolor as a “cockroach” — signalling that more alleged dodgy borrowers could be in the hiding.

This had briefly led to the 10-year Treasury yield slipping below 4%. Dwindling yields often lead to a surge in the price of gold.

Gross, however, believes the concern of Treasury yields is unsubstantiated. "Regional bank 'cockroaches may continue to affect stocks AND bonds. 10 year Treasury has no business below 4% though 4.5% more like it — too much supply/deficits despite slowing, soon-to-be 1% growth economy (sic)," he said, while recommending investors to wait before buying gold.

Meanwhile, gold prices continue to remain firm, with US spot gold trading 0.3% higher at 4,261 an ounce on Monday. The metal saw an appreciation in excess of 8% last week, which led to experts questioning the fundamentals behind the rally.

The way gold price moved last week indicates "something serious", according to economist Peter Schiff. "Something big is about to happen," he wrote on X on Friday.