Analyst: Silver to “Test $50”

Release Date: 
Friday, July 18, 2014

Gold and Silver Prices

Gold and silver prices fell this week despite increasing violence in the Middle East and the recent missile attack upon a Malaysian airline by Ukraine separatists. “Geopolitics is back on the front burner of the market place late this week, and with a double-barrel blast. On Thursday morning a Malaysian airliner was shot down on the Russia-Ukraine border, and on Thursday afternoon Israel started a ground offensive against Hamas on the Gaza strip…As mentioned in this space earlier this week, I am surprised at the nonchalance of the market place this summer, regarding geopolitical matters that are significant…All of the above augurs firmly in favor of safe-haven investment assets that include gold…” (“Gold Weaker on Corrective Pullback, but Geopolitics Limits Selling Interest,” Kitco News, 7/18/14.)

Gold finished the week down $28.05, closing at $1,311.90. Silver prices closed the week at $20.99, down $0.54.

Analyst: Silver to “Test $50”

“An upward trend is afoot in the silver space, says Sean Rakhimov, editor of SilversStrategies.com. Rakhimov believes that at $26/ounce the reversal of the downward trend in silver will be confirmed and silver investors should set their sights on the next resistance level—$32/ounce. And if that threshold is breached, silver will test $50/ounce and more…‘if we take $50/oz convincingly, then there's a good chance that this move is going to have some serious legs.’” (“Sean Rakhimov: Upward Trend a Silver Investor's Friend,” The Gold Report, 7/16/14.)

U.S. Treasury Secretary Warns Cyberattacks Can Cause “Massive Harm” to Financial System

Treasury Secretary Jack Lew warned financial institutions and investors that continuing cyberattacks against the U.S. may devastate our financial system.

“[C]yber intrusions are not some hypothetical event on the horizon. They were real and they're happening every single day. These incidents represent a direct threat to our economic and national security, perpetrated by state and non-state actors around the world with growing intensity and increasing sophistication…And successful attacks on our financial system would compromise market confidence, jeopardize the integrity of data and pose a threat to financial stability. Cyber intrusion is far reaching consequences…Hackers accessed A.P.'s twitter account and announced a false alert saying there had been an attack on the White House, which drove down the Dow for three minutes temporarily erasing roughly $130 billion of value from U.S. stock markets…”

“Risks to the system can be found at the vendors, suppliers and contractors who keep our financial system running. They can be found in industries that underpin the marks like telecommunications and energy and they can be found across the physical infrastructure that supports the economy like our entertainment system and water supply. These related companies, industries and utilities rely on a network of computer systems and an incursion at a strategic point along the network could lead to market disruption and massive harm.” (“Jack Lew, Delivery Alpha Speech,” CNBC, 7/15/14.)

Yellen: Recovery Is Incomplete; Loose Monetary Policies to Continue

Federal Reserve Chair Janet Yellen testified before a Senate committee on the challenges facing the U.S. economy.

“The U.S. economic recovery remains incomplete, with a still-ailing job market and stagnant wages justifying loose monetary policy for the foreseeable future, Federal Reserve Chair Janet Yellen told a Senate committee on Tuesday. In a strong defense of the central bank's current stance, Yellen said that early signs of a pickup in inflation aren't enough for the Fed to accelerate its plans for raising interest rates, a move currently expected in the middle of next year. That could change, with interest rates rising sooner and faster, if data show labor markets improving more quickly than expected, she said. But as it stands, ‘although the economy continues to improve, the recovery is not yet complete…Too many Americans remain unemployed…’” (“Fed's Yellen says U.S. recovery incomplete, defends loose policy,” Reuters, 7/15/14.)

BRICS Nations Seek to Create International Bank To Compete with World Bank

The so-called BRICS nations of Brazil, China, India, Russia and South Africa are planning to launch an international bank to champion emerging markets.

“China will dedicate itself to ‘perfecting’ the role developing countries play in international affairs to give them better representation and a greater say, President Xi Jinping said ahead of a summit of BRICS nations in Brazil. China has already started doing this by promoting international development banks which will either be led by China or will have a very strong Chinese role, as opposed to Western-dominated institutions like the World Bank.

“Brazil, China, India, Russia and South Africa are due on Tuesday to sign off on a new development bank being launched by the BRICS emerging market nations…China is also planning an Asian Infrastructure Investment Bank. [Chinese President Xi Jinping said] ‘We will...dedicate ourselves to perfecting the international system of governance and proactively push for expanding the representation and right to speak for developing countries in international affairs…’” (“China pushes for developing world's rights as BRICS summit opens,” Reuters, 7/15/14.)

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Goldline provides a wrap-up of the week's precious metals news along with important commentary on the American Advisor Week in Review audio program. Listen to the show below:

 

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†This material has been prepared for private use. Although the information in this commentary has been obtained from sources believed to be reliable, Goldline does not guarantee its accuracy and such information may be incomplete or condensed. The opinions expressed are subject to change without notice.

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