Mark Cuban: I'm Buying Gold Because I'm 'Confused' About Markets

Mark Cuban: I'm Buying Gold Because I'm 'Confused' About Markets

Billionaire Mark Cuban said he is counting on gold as the only safe investment in such volatile times like these because the recent global market volatility has "confused" him.

"I think people are so confused about this market. Nobody really understands what's happening, including me. So, things that I thought made sense didn't make sense and weren't working...when traders don't know what to do, they go where everybody is. And I thought that would be gold," Cuban told CNBC.

Cuban, the owner of the Dallas Mavericks and a "Shark Tank" investor, said he did not see "any type of softness at all" in the economy.

Cuban said that he bought "a lot" of out of the money call options on gold. In a post on social platform Cyber Dust, he noted he did not think gold was a hedge, but that people looking for momentum would push the price of the metal higher, Cuban told CNBC.

Cuban wrote that the metal would not have to go much higher than its Thursday price for his trade to make him "happy." However, he added that he was not recommending that other investors should buy gold. "If you don't know what to do, do nothing."

Gold surged more than 4 percent on Thursday to its highest in a year as fears about financial uncertainty, a lower dollar and U.S. Treasury yields persuaded investors to seek refuge in the precious metal.

Traders said financial instability fears were fueled by European bank shares slumping to multi-year lows, with concerns mounting over banks' profitability in a low-growth and low-interest rate environment.

"The safe-haven seekers are moving back. We recommend clients add gold to their portfolios as insurance, if things turn out really bad, there will be much more upside," Julius Baer analyst Carsten Menke told Reuters.

"Look at the massive inflows into ETFs (Exchange Traded Funds) this year. They put the price recovery on a much more solid footing than any of the other recoveries we've seen over the past couple of years."

Gold's downward trajectory started in May 2013 when former Federal Reserve Chairman Ben Bernanke first mentioned tapering or reducing monthly bond purchases and markets started to think about eventual higher U.S. rates.

But expectations about the pace of U.S. rate rises and the magnitude have been scaled back. This has been reinforced by Fed Chair Janet Yellen saying tighter credit markets, volatile financial markets, and uncertainty over Chinese economic growth had raised risks to the U.S. economy.

For the very best prices on Gold and Silver, go to: GoldSilverAlliance.com
Read more: Mark Cuban: I'm Buying Gold Because I'm 'Confused' About Markets