Despite forecasting many warning signals for the market some prominent investors continue to maintain their positions. An exception to this is Naguib Sawiris, an Egyptian billionaire who has put fifty percent of his net worth (estimated at about $6 billion) into gold. What prompted him to make such as drastic move?

He Believes That Geopolitical Factors Will Cause Higher Gold Prices

Sawiris has stated in interviews that he feels the stock market is overvalued, and is due for either a correction or even crash. Meanwhile, American gold coins will continue to push upward, due to a number of international occurrences. For one, China is emerging as a major economic and military power, and their population will continue consuming into the forseeable future. This is particularly true for raw materials.

Additionally, Sawiris pointed out that gold has always been the “crisis metal,” the commodity people run to when times are unstable or uncertain. With the ongoing crisis in the Middle East, and the manner in which the international community and U.S. have responded to it, the yellow metal is looking more attractive than ever. Then there is the situation in North Korea, which Sawiris says has also influenced his investment decision.

If a peace deal with the North Koreans can be established, his investments in the region would pay off. He has waited over a decade to repatriate his funds, and would also be able to exercise greater control over the mobile phone business he owns. The second wealthiest man in Egypt, Naguib Sawiris says the accord would be a good deal for him. He took part in the founding of Koryolink, which is North Korea’s first telecom business, as well as constructing a hotel there.

As you can imagine, governments in the West haven’t been thrilled with his decision to take such a large position in gold, but especially his decision to conduct business in North Korea, in light of the many global sanctions that have been placed on them. However, Sawiris recognizes the tremendous opportunities which could be had there, particularly if the peace deal is reached.

How High Will Gold Go?

It is difficult to tell, and no one, not even Sawiris is exactly sure. However, his decision to diversify his holdings by taking such a large position in gold has caught the eye of many other commodity investors, both prominent and otherwise. Sawiris has made some major moves in Egypt, acquiring Beltone Financial. He also tried to acquire CI Capital Holdings, which would have resulted in him controlling the largest Egyptian investment bank, but the purchase was denied. In addition to owning physical gold, he has shown an interest in mining, becoming one of the biggest investors in that sector. Naguib Sawiris comes from an investment family with a long track record of success, so his decision to invest so substantially in gold shouldn’t be taken lightly.