Article by Anna Golubova in Commodity Trade Mantra

An economic downturn is on its way and the best hedge against a major stock market sell-off is gold, silver, which are “widely under-owned” at the moment, said hedge fund Crescat Capital.

“Precious metals are one of the few pockets of this market offering tremendous value to hedge against extreme monetary policies, bursting asset bubbles, and record global leverage,” Crescat Capital said in its Q2 2019 Research Letter. “We see this opportunity playing out across gold, silver, and related mining stocks.”

In order to capitalize on the looming economic downturn, one of the best-performing hedge funds of 2018 is focusing on precious metals.

“Gold is the ultimate form of money with a long history of storing value for investors and outperforming risk assets during market downturns. In our view, a new awareness of global fiat currency debasement policies is now in its early stages. Gold should become a core asset for those who believe in this macro development, but it is still widely under-owned today,” Crescat Capital told its investors

Following a solid rally both in gold and silver, precious metals prices have a lot more room to go higher, highlighted the hedge fund.

The looming economic downturn will have a “brutal” impact on U.S. stocks, projected Crescat Capital.

The stock market sell-off could be as big as 50%, added Crescat Capital, warning that the equity space’s future looks bleak.

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