Gold is in the Beginning of a New Bull Market- What Analysts and Banks See Ahead for Gold
[VIDEO] Leading Wall Street Analyst: Gold Will Hit $1900; Get In Now
Market Analyst Peter Boockvar was interviewed on CNBC this week saying that gold is in the beginning of a new bull market. He believes many are reading the market wrong and that gold and silver still have a ways to climb. Boockvar said the 2011 highs of $1900 are reachable and possibly passable. Here is his interview discussing Fed rate hikes and the future move on gold.
Why this matters to precious metals investors:
Boockvar’s assessment is that the current dip in prices is a perfect time to get into the gold market. Gold has been down the past couple weeks, but is still up 17% overall this year.
What Are the Potential Fed Interest Rate Hikes Doing to Gold and Stocks?
On Friday, Janet Yellen – chair of the Federal Reserve – announced that cautious rate hikes over the next few months are appropriate due to positive economic indicators. In anticipation of an announcement of a rate hike, gold has been down this week with a mixed performance in stocks.
However, this flies in the face of previous experience with rate hikes. The last time the Fed raised rates in December, the stock market practically collapsed. The positive economic indicators that the Fed is citing to justify the hikes are also likely exaggerated. Policy speculation alone has immediate repercussions in the market, so it could be that this speculation is accomplishing what the Fed wants to happen in the markets.
Why this matters to precious metals investors:
It is likely that the Fed is predicting a future downturn, and with rates currently so low, they would not be able to further lower them again without first having raised them. This indicates a lack of confidence in the economic recovery. The hike could have a negative equity impact like it did in December and gold would be the last asset-class standing.
Global Economic Trends Impacting Gold Right Now
Gold prices are caught in a tug of war of macroeconomic trends right now. Brexit fears are positive for price, while possible interest rate increases are holding it back. Demand is increasing in China on fear of economic uncertainty and the November presidential election will further market volatility. Central banks around the world are adopting negative interest rates, which implies economic weakness. Hedge funds are increasingly moving into increasing gold in their portfolios.
Why this matters to precious metals investors:
Despite its price dip this week, gold still has strong support. Indicators of a global economic slowdown are increasing and investors are protecting their funds with gold ahead of it.
Gold Setback Temporary? What Some Banks See Ahead for Gold
In the past couple weeks, banks like JP Morgan Chase and Goldman Sachs have moved into a more bullish stance on gold, despite prospective interest rate hikes and recent price dip. Dutch bank ABN Amro is the latest to join the gold ranks. Their precious metals and FX strategy division reported that the current strength that the U.S. dollar is enjoying – contributing to the gold price pullback – is transient and a blip in the markets. Their projections are for increased inflation, and that there will be many other factors come into play on gold price other than the dollar.
Why this matters to precious metals investors:
Gold prices rise on a weak dollar, so if the current dollar strength is headed for a crash as many analysts are predicting, gold would see strong support. There is much global volatility, which will buoy up gold prices and hurt interest-bearing investments.
Here are some articles from the web discussing the topics in this week’s post:
Leading Wall Street Analyst: Gold Will Hit $1900; Get In Now
Read Here
What Are the Potential Fed Interest Rate Hikes Doing to Gold and Stocks?
Read Here
Global Economic Trends Impacting Gold Right Now
Read Here
Gold Setback Temporary? What Some Banks See Ahead for Gold
Read Here
As always, I encourage you to speak with your broker at RME for more market updates. Expert brokers are available Monday-Friday from 9 AM- 5 PM or by special appointment after hours. Call today at 602-955-6500 or toll-free at 877-354-4040.
