Gold Price Hits $1,300 – Could it be Moving Towards $1,500?

08 May
Gold Market May

Gold Price Hits $1,300 – Could it be Moving Towards $1,500?

Stronger Dollar-Eurozone Fears

Gold Price Hits $1,300

gold bull market 2016
On Monday, gold spot price passed the $1300 mark for the first time in over a year. Gold is up now 22 percent for the year and is crushing stocks, bonds, and most other asset classes. Gold’s performance this year has been driven by a few different factors. The first was the stock market’s dismal performance at the start of the year. This drove investors to the safety of gold. As the stock market picked up, gold calmed down until recently, when the dollar began to take massive hits. The dollar’s strength of the last couple years is starting to fail, and a weak dollar means gains for gold

Why this matters to precious metals investors:
This interview from Bloomberg this week on the dollar dilemma succinctly describes the relationship between gold and the dollar and why now is an optimal time to buy gold. Some market experts are projecting that gold is on the path to $1500 before year’s end.


Leading Analysts Predict Gold to Keep Rising and Advise Buying Now

Stanley Druckenmiller says get into gold
Billionaire hedge fund manager Stanley Druckenmiller advises to get out of the stock market and get into gold

Renowned billionaire and hedge fund manager Stanley Druckenmiller advised investors this week to get out of the stock market, sell off equities, and head towards gold. He pointed towards Fed recklessness in borrowing from future consumption and slowing cash flow in U.S. corporations as foreboding signs for the dollar’s future.

Dennis Gartman, on CNBC’s “Fast Money” on Monday, predicted gold could end the year 10 or 15 percent above current levels. He argued that fundamental principles were in place that favored precious metals due to central banks’ policies. Many of the world’s central banks are favoring an easy monetary policy with low interest rates that is making their currencies less valuable. As currency weakens, precious metals become more attractive as a safe haven investment.

Why this matters to precious metals investors:
These market experts are seeing recklessness and uncertainty lying on the horizon for the U.S. dollar (and the global economy at large). These are indicators that gold is going to start becoming more attractive as a safe haven investment, which will drive the price. Gold has moved past the bear market it has been stuck in and its projections for this year are bright.


Stock Market Experiences Worst Week Since February

stock slip worst since February 2016
The stock market closed out April with its worst losses since February. This caused even more unease among investors because of the market’s weak performance at the start of the year. Power players like Apple, Google, Microsoft, and Chevron all suffered major losses. The effect of the Bank of Japan’s shock decision to keep negative interest rates also is impacting the stock market and hitting the dollar and yen.

Why this matters to precious metals investors:
The stock market’s volatility this year is making investors wary and risk-adverse. If this trend continues, demand for precious metals will soar even higher, pushing prices up. Monetary policies from the world’s central banks are also indicating future scenarios where safe haven precious metals will thrive.


Silver Eases Back This Week, But is Expected to Rise Again

silver is on the rise
Silver’s stellar performance over the last few weeks eased back slightly this week. The corrective move will likely be temporary, as U.S. economic data, monetary policy, and increased demand in China will continue spurring the metal’s gains. So far this year, silver is up more than 23 percent and has hit highs not seen in over a year. The dollar dilemma driving gold is also driving silver, and the Fed’s policy and weak stock performance will also drive silver price.

Why this matters to precious metals investors:
Unemployment in the U.S. is rising and economic growth is slowing, according to data coming out this week. These signs are pointing ominously towards a declining dollar. Despite some resistance this week, silver is still the strongest performing investment of 2016 so far. Take advantage of the pull back now to invest.


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

Gold Price hits $1,300
Read Here

Leading Analysts Predict Gold to Keep Rising and Advise Buying Now
Read Here

Stock Market Expereinces Worst Week Since February
Read Here

Silver Eases Back This Week, But is Expected to Rise 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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