This was a target we set on Monday, June 19, 2006, however it is taking longer to get there than we anticipated back then.
It was 10 years ago but the reasons for this gold price forecast were roughly as follows:
(Washington, D.C. – March 16, 2017) The silver price has started 2017 on a positive tone, rising by roughly 9 percent since the beginning of the year.
The strength of silver prices is largely due to improving sentiment among institutional investors.
Parliament has passed the Brexit bill, paving the way for the government to trigger Article 50 so the UK can leave the European Union.
Peers backed down over the issues of EU residency rights and a meaningful vote on the final Brexit deal after their objections were overturned by MPs.
Is Inflation a problem?
By Chris Marchese, Senior Equity Analyst
The Morgan Report
Since “Surprise 16” when Donald Trump won the presidential election, he has made it clear that if he has his way, he will enact inflationary policies. These include increasing defense spending and infrastructure spending, while at the same time reducing government revenue via decreased income and corporate tax rates.
To achieve this objective, money must be created, which could be referred to as “helicopter money.” This is a more direct way of increasing the money supply, using fiscal policy as opposed to monetary policy.
This year gold’s fortunes will be influenced by the actions of the Central Bankers and the Geo-Political chaos which is simmering in various parts of the world. We are all aware that there are many factors that influence the precious metals sector; however, today we will only look at these two as I believe they are the dominant factors.
Janet Yellen’s speech on Friday referred to possible rate hikes being implemented sooner rather than later as economic conditions would appear to have improved. Also note that inflation had popped above 2% for the first time in 2½ years which can be construed as an additional reason for the Federal Reserve to lift interest rates progressively this year
he Fed will hike rates this month and signal further hikes to come. Gold prices have yet to fully digest this reality, and therefore there is a strong case for a major move lower in the yellow metal. A Le Pen victory in France could derail the Fed’s plans for a follow up hike in June, but in the short term the gold market is vulnerable to a sharp move lower. There are a number of trapped speculative longs in the futures and mining stocks and we are approaching a period of seasonal weakness. We target a move to $1050 initially, and see merits in a larger move to $720 should the Fed persist with further hikes.
March Hike A Done Deal
The Fed speakers last week unequivocally signalled a March hike. Yellen’s speech to cap the week off confirmed this, and we therefore expect the Fed to hike at next week’s FOMC meeting. Although we still have an employment print before then, the Fed can look through the weakness of one print given the strength of the rest of the data and their clear preference to raise rates.
The Fed has made it clear
At exactly 1130ET (as Europe closed), someone decided to unload over $2 billion notional of silver into the futures pits...
U.S. economy near Fed goal of stable prices, full employment
Dudley signals ‘compelling’ case, Brainard tilts hawkish
Six Hundred Million Ounces of Silver to be Consumed in Photovoltaics and Ethylene Oxide Production Through 2020