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Gold & Precious Metals

Gold's Fundamental Outlook for 2017

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Posted by Arkadiusz Sieron

on Monday, 16 January 2017 11:51

Predicting, especially the future, is very difficult. Still, let's try to figure out what investors should expect from the gold market next year. For sure, in the long run, the price of gold will mainly depend on the U.S. dollar, the real interest rates, and the market uncertainty. How will these factors develop and affect the gold market?

Well, as one can see in the chart below, the level of investors' confidence has strengthened recently, as both the market volatility (represented by the CBOE Volatility Index) and credit spreads (illustrated by the BofA Merrill Lynch US High Yield Option-Adjusted Spread) have diminished after the U.S. presidential election. Hence, the risk aversion should be low for a while, and so the safe-haven demand for gold. Surely, if such risks as China's hard landing, the banking crisis in the Eurozone or the turmoil in the U.S. bond markets materialize, gold may again shine as a safe-haven asset. However, investors should remember that gold failed to rally on negative news in 2016, while stock markets flourished.

Chart 1: The CBOE Volatility Index (green line, left axis) and BofA Merrill Lynch US High Yield Option-Adjusted Spread (red line, right axis) in 2016.
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And what about the U.S. dollar and real interest rates? As the next chart shows, both indices have been rising since October, which corresponded to the plunge in gold prices.

Chart 2: The U.S. dollar index (green line, left scale, Trade Weighted Major U.S. Dollar Index) and the U.S. real interest rates (green line, left scale, yields on 5-year Treasury Inflation-Indexed Security) in 2016.



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Gold & Precious Metals

The bullish case for gold in 2017

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Posted by Frank Holmes - US Global Investors

on Thursday, 12 January 2017 08:18

You could say gold miners struck gold in 2016. The group, as measured by the NYSE Arca Gold Miners Index, finished the year up an amazing 55 percent, handily beating all other asset classes shown below.

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Miners were followed by commodities at 25 percent and silver at 15 percent. Gold finished up 8.6 percent, its first positive year since 2012, when it gained 7.1 percent. (Keep your eyes peeled for our forthcoming annual periodic table of commodity returns, one of our perennially popular pieces!)

I find it curious that many in the financial media continue to have a bias against gold, even though it generated better returns in 2016 than 10-year Treasuries and the U.S. dollar, which performed half as well. And when it was up as much as 28 percent in the summer, they still didn’t have anything positive to say, arguing it had gone up too much.

(Gold traders, on the other hand, have a much different opinion about the metal right now. A group of traders recently surveyed by Bloomberg revealed they are the most bullish on goldsince the end of 2015, soon before it rallied in its best first half of the year since 1974. The traders cited geopolitical concerns, both in the U.S. and Europe, as well as stronger demand in 2017.)

And isn’t it interesting that the same media figures who are biased against gold are usually the same ones who seem to have only disparaging things to say about Brexit and President-elect Donald Trump? What they don’t realize is that if Brexit and Trump succeed, so too do the U.K. and the U.S. Are they hoping Brexit and Trump will fail so they can be proved right?

The smart people realize personal politics must be put aside. Despite supporting Hillary Clinton during the primaries, Warren Buffett now says he is behind the president-elect—because he knows that if the U.S. does well, he does well too. Despite campaigning hard against Trump, President Barack Obama says now we should all be rooting for Trump, regardless of our politics.

Negative Real Rates Should Drive Gold Prices



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Gold & Precious Metals

Gold: The Rate Hike Rally Continues

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Posted by Stewart Thomson - Graceland Updates

on Wednesday, 11 January 2017 07:52

Jan 10, 2017

  1. The last two bear markets in US stocks were deflation-oriented. 
  2. The next one is likely to be inflation-themed, and could feature the US dollar and gold soaring higher at the same time.
  3. Please  click here now. Chinese producer price inflation is suddenly growing at the fastest pace in five years, and it will soon be exported to America. 
  4. Please  click here now. Double-click to enlarge. 
  5. Gold has been rallying since mid December. It may be poised to breakout to the upside from the $1170 - $1185 trading range and rise to $1200.
  6. Please  click here now. Hedge funds are holding a lot of short positions in gold on the COMEX.


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Gold & Precious Metals

Gold Price Plummet

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Posted by Catalin Chiloflischi, CEO Canarc Resources

on Monday, 09 January 2017 17:38

This article by Dan Kurz makes a very good macro-picture and valuation case that the post-Trump gold slump could be a good time to buy precious metals. Some serious analytics here. ~Catalin

"Gold per troy ounce (toz or oz) in $ terms has slumped by a whopping 11% since the November 8, 2016 election. The dollar’s trade-weighted value, meanwhile, has risen by 4% over the same period, while the value of the 10-year Treasury has fallen by a considerable 6% and the S&P 500 has rallied by 6%. What happened? In a nutshell, perception changed. Traders bet on more fiscal stimulus-based growth, lower corporate taxes, higher federal deficits, higher nominal interest rates, and higher inflation, so stocks went up, bonds went down, and the buck went up.

Strangely, and in contrast to the above “playbook,” gold and silver prices, or precious metals (PM) prices, fell and fell... CLICK HERE for the complete article



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Gold & Precious Metals

Gold Price Plummets After Trump Win, Huge PM Purchase Opportunity

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Posted by SchiffGold

on Monday, 09 January 2017 10:57

Gold per troy ounce (toz or oz) in $ terms has slumped by a whopping 11% since the November 8, 2016 election. The dollar’s trade-weighted value, meanwhile, has risen by 4% over the same period, while the value of the 10-year Treasury has fallen by a considerable 6% and the S&P 500 has rallied by 6%. What happened? In a nutshell, perception changed. Traders bet on more fiscal stimulus-based growth, lower corporate taxes, higher federal deficits, higher nominal interest rates, and higher inflation, so stocks went up, bonds went down, and the buck went up.

....read more HERE



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