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Gold prices are smashing record highs but it’s still a risky bet — ‘You’re not sending gold to buy your Domino’s pizza,’ finance expert warns

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  • Gold is traditionally viewed as an age-old hedge against inflation and market volatility, and the precious metal’s price has surged amid President Donald Trump’s on-again, off-again tariff threats. Finding liquidity can still be tricky, however, and the risks are particularly high for smaller investors. 

It turns out tariffs are good news for goldbugs. As trade policy uncertainty and recession fears rattle markets, surging demand for safe-haven assets helped briefly drive the precious metal’s spot price above the milestone $3,000 mark for the first time on Friday, though it declined later in the day.   

A historic buying spree of bullion by central banks has helped spur a rally in recent years, but traders have been rewarded for their bets on the metal for some time. Gold prices have risen about 10-fold since 2000, per Bloomberg, while the S&P 500 has merely quadrupled. As interest in the metal picks up, however, smaller investors may especially want to think twice before adding bullion to their portfolios.

Gold isn’t as liquid as it’s often made out to be, Rob Haworth, a senior investment strategist at U.S. Bank Wealth Management, told Fortune. After all, it’s probably a stretch to say the metal is easily convertible into cash and exchangeable for other goods and services.

“You’re not sending gold to buy your Domino’s pizza,” he said.

In that same vein, the metal can be harder for smaller investors to buy and unload at a competitive price compared to institutions, which often have better access to gold markets and larger quantities of bullion to sell. 

Nonetheless, gold has long held appeal as a hedge against inflation and market volatility. Preliminary results from the University of Michigan’s famous consumer sentiment survey showed respondents are more pessimistic about the U.S. economy than they’ve been since 2022. Many consumers, including Republicans, said “frequent gyrations in economic policies” have made it difficult to plan financially, noted survey director Joanne Hsu.  

Beyond President Donald Trump’s on-again, off-again tariff threats, a general dearth of earnings news from companies has also helped cultivate an increasingly uncertain environment, Rob Haworth, a senior investment strategist at U.S. Bank Wealth Management, told Fortune.

“That’s where people seek safe havens,” he said, “and gold can be seen as that.”

Haworth is somewhat skeptical of the metal’s long-term prospects, but he noted inflation expectations in the Michigan survey spiked to 4.9%, up from 4.3% in February and the highest reading since November 2022. On the other hand, he said, fears of an economic contraction could weigh on gold prices. 

“Because everyone just needs liquidity at that point, right?” he said. “Everyone needs cash.”

While bullion’s nominal spot price has just reached an all-time high, gold’s inflation-adjusted peak of $3,800 came in 1980. That’s when America found itself in the throes of “stagflation,” or the unusual malaise of both runaway inflation and flagging growth.

Central banks dominate market

Central bank buying has fueled gold’s rally in recent years. As countries like China continue to push for de-dollarization, or weaning themselves off the world’s reserve currency, it likely serves as a massive tailwind for the metal. The U.S. dollar has weakened in recent weeks, which makes gold cheaper for foreign buyers since the metal’s price is quoted in greenbacks.  

Purchasing sprees from the likes of China, Poland, India, and Turkey have coincided with less foreign buying of U.S Treasuries, Haworth noted. Meanwhile, if tariffs force targeted nations to export less to America, he explained, they will have even less money to spend on U.S. debt.

“So that trend probably continues” Haworth said, “And it appears to be a goal, right, of current U.S. policy.”

As the Trump administration, which appears fixated on America’s trade deficits with other countries, attempts to reshape global trade, some investors also tout gold’s ability to preserve value amid macroeconomic turmoil.  

“We’ve seen that over centuries gold has been able to—despite the volatility—always mean-revert and always maintain its purchasing power, all while providing significant liquidity,” Thomas Kertsos, co-portfolio manager at First Eagle Investment Management, told Bloomberg.

But Haworth isn’t sure bullion provides that function for investors. That may be something to think about before rushing to Costco to buy more gold bars.

This story was originally featured on Fortune.com



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How Jump and Solana vets are building a hyper fast internet for blockchains

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High-frequency traders are the whiz kids of Wall Street. They either code scripts to execute quick trades to eke out small profits that, multiplied by one or ten thousand times over, result in serious cash. Or they’re able to act milliseconds faster than competitors to score big bets on market swings. Speed is paramount, which is why HFT traders have created their own private networks of internet cables—now, a crypto project called DoubleZero wants to do the same to speed up blockchains.

“We can use a whole different set of technologies that have basically been standard and de facto in the high-frequency trading world… but are not available over the public internet, so they’ve never been applied to blockchain before,” Austin Federa, cofounder of DoubleZero and a former executive at the Solana Foundation, told Fortune.

Federa’s project, which has the same obsession with speed as the firms in Michael Lewis’s famous HFT book Flash Boys, has already attracted capital. DoubleZero Foundation, one of the entities behind the project, announced in early March that it had raised $28 million in a seed round led by marquee crypto investors Multicoin Capital and Dragonfly Capital. Other venture capital firms that contributed were Foundation Capital, Reciprocal Ventures, DBA, Borderless Capital, Superscrypt, and Frictionless. In exchange for their cash, investors received token warrants, or promised allocations of a yet-to-be-launched cryptocurrency, Federa said. 

CoinDesk Solana or Ethereum are like Amazon Web Services or Google Cloud—but decentralized. 

And like any cloud computing network, blockchains have physical servers that process users’ transactions and run programmers’ apps. Currently, when servers that power the Solana blockchain, for example, need to communicate with each other, those signals run over public internet infrastructure, said Federa. DoubleZero aims to create a private network of cables to speed up a blockchain’s processing power.

Jump Crypto, the digital assets subsidiary of HFT firm Jump Trading, and Malbec Labs are the engineering entities behind DoubleZero. They won’t be laying down physical cables to construct the network, said Federa. Not yet, anyway. Rather, the company is cobbling together underutilized bandwidth from HFT firms, private companies, and even individuals to build out a faster physical network of cables than what is currently available for blockchains.

And to make sure that, just like a blockchain, this physical network is decentralized, Federa’s foundation plans to launch its own cryptocurrency to reward those who contribute bandwidth to the project.

Federa’s other cofounders are Mateo Ward and Andrew McConnell. Ward is the former CEO of Neutrona Networks, a portfolio company of Jump Trading that specialized in building private internet networks. And McConnell was a former top engineer at Jump.

This story was originally featured on Fortune.com



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Water bottle Owala is to Gen Z what Stanley Cup is to millennials: ’emotional support.’ Inside the rapidly growing family business’ success story

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How Trump’s tariffs could tank the U.S. economy

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FORTUNE is a trademark of Fortune Media IP Limited, registered in the U.S. and other countries. FORTUNE may receive compensation for some links to products and services on this website. Offers may be subject to change without notice.



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