Goldman Sachs Chief Advises Simplifying Portfolios and Buying Gold Amid US Market Volatility

Tony Pasquariello cites intense divergence and high momentum volatility in US equities, recommending portfolio simplification and tactical gold accumulation on dips despite short-term headwinds.

Woofun AI reports that Tony Pasquariello, Head of Hedge Fund Business at Goldman Sachs, described the current US stock market as "extremely challenging to navigate" due to intense internal divergence and high volatility in the momentum factor. He advised investors to simplify portfolios and concentrate risk on high-conviction positions, noting that while S&P 500 implied volatility remains limited, the widening gap with individual stock volatility indicates strong demand for single-stock options and dispersion trading.

Pasquariello expressed a bullish stance on gold, citing the washout of speculative longs since 2026, resumed central bank purchases, and support around $4,000. He suggested that rising US interest rates and a stronger dollar offer opportunities to build structural long positions on dips, driven by increasing global government debt burdens. Regarding AI, credit supply has reached $489 billion this year, but the link between capital expenditure and revenue growth remains unconfirmed, with upcoming earnings from Microsoft, Meta, and Amazon serving as key tests.

Additionally, Fed rate hike expectations and geopolitical tensions in Iran and the Red Sea may intensify volatility, while accelerated stock buybacks are expected in August as earnings season concludes.