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Gold Has Hit the Low for 2017 and Climbs This Week on Uncertainty

15 Jan
Gold Market May Bull

Gold Has Hit the Low for 2017 and Climbs This Week on Uncertainty

Gold Market Discussion

Gold Has Hit the Low for 2017 and Is Set to Climb

Gold Market MayIn December 2015, RME called the gold price bottom, and 2016 followed with a rally in metals.  Once again, we are calling that gold has hit the low for 2017 already. In 2015 the price bottomed at $1,055. On January 3rd this year, gold was at $1,151.

Gold was up 4% overall for 2016. Earlier in 2016 it was up over 20% before pulling back. Investors were predicting a new bull market last year, and the signs are becoming even more apparent now that we can expect this gold bull market to run for a while.

What this means for investors: Buy gold and silver now while prices are still low against a strong dollar. When gold prices dipped last fall on a strong dollar and stock market rally, gold “went on sale.” When inflation hits, dollars will have less purchasing power, so gold will increase in value against the dollar.

Gold Prices Rally This Week on Global Uncertainty, Hitting 6-Week Highs

Global Risk

This past week gold was trading at 6-week highs breaking through the $1,200 mark. It got its boost in part from signs of weakness from the dollar, which slipped from some of its recent strength.

Gold is also rising on investor confidence. Investors are starting to fear the imminent burst of an overvalued stock market. After coming within a few points of 20,000 in the past couple weeks, the dow retreated over 100 points this week, and has yet to reach that milestone.

Uncertainty around President-Elect Trump and his first term fueled safe haven metals buying as well. The stock and bond markets showed signs of increased volatility during his press conference. When these markets get jittery, gold prices gain. Regardless of whether you are pro-Trump or anti-Trump, Democrat or Republican, there are many unknowns ahead as geopolitical tensions shift and morph. Just this week, the U.S. has deployed an armored tank division into Poland as part of the ongoing Operation Atlantic Resolve. Fear around these global trends is going to boost safe haven buying.

What this means for investors: Investors around the globe are preparing to hedge against uncertainty. With renewed demand in India and China and sell-off starting to pick up pace in the stock and bond markets, gold will become more desirable.

Gold at a Historic Breakout?

Gold just achieved a rare break out. It is indicated by a crossing over of the 50-WMA above the 200-WMA in a bullish break out. The last time the markets saw such a break out was in 2002, and it was the beginning of the last major bull market. These charts illustrate exactly what this has meant historically for gold prices, and what it could mean for the future bull market.

What this means for investors: The last time this breakout occurred, gold prices rose 429% over the course of nine years. Gold has shown time and again that it the most reliable long-term investment, and as we prepare to move into a new bull market, metals will prove their historic worth once again.

Silver is Poised to Rally Again

stacked silver barsSilver made headlines throughout 2016 for its – at times – 30% gains. The white metal pulled back with gold in the fall, but still closed out the year with 17% gains. Silver, like gold, is positioned for a bull market this year. Analysts say that silver will fall only if investment demand does, and so far, it appears investment demand is positioned to increase in the long term. Silver also has more industrial uses that factor into its spot price, and these uses are not likely to decrease anytime soon.

What this means for investors: Silver is perfect for investors who cannot afford a gold portfolio. It is also useful for diversifying a gold portfolio to hedge with different options. Gold has hit the low for 2017, and silver could have as well.

 

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 Here are some articles from the web discussing the topics in this week’s post:

Gold Has Hit the Low for 2017 and Is Set to Climb

Read Here

Gold Prices Rally This Week on Uncertainty, Hitting 6-Week Highs

Read Here

Gold at a Historic Breakout?

Read Here

Silver Is Poised to Rally Again

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.

“I’ll be keeping a sharp eye on the market and I encourage you to do the same!”

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