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Gold and Silver Prices
Gold prices rebounded on Friday with an intraday gain of more than $20 as investors sought protection from falling markets and a weaker U.S. dollar. “Gold prices rose Tuesday as some investors sought to protect their wealth from losses … and a weaker dollar…Some investors buy gold to protect their wealth against losses in other markets on the belief that the precious metal will hold its value better than … cash. A weaker dollar also bolstered gold’s appeal to foreign buyers.” (“Gold Prices Climb as Investors Seek Safety,” WSJ, 1/30/15.)
Despite Friday’s gains, gold finished the week down $11.00, closing at $1,284.10. Silver prices closed the week at $17.33, down $1.07.
Gold Prices to “Rocket Into Outer Space:” Kitco Commentator
Kitco Commentator Jay Taylor wrote that negative interest rates will lead to skyrocketing gold prices.
“For a long time, all the gold haters would argue, ‘There is no reason to own gold because it doesn’t pay interest. It is a dead asset.’ But now as in the 1930s there is the nonsense phenomenon of negative nominal rates of interest, and yet the impossible is happening. The following charts from Bloomberg show that Swiss yields are now below zero … Up to one year, you pay the Swiss Bank 1% of your account annually for the privilege of being a non-secured creditor to the bank. This is absolute madness and it shows why the price of gold is destined to rocket into outer space… the destruction of capital and capitalism by destroying price discovery of capital with zero interest rate policies around the globe has put the nail in the coffin of ongoing capitalism without massive destruction and chaos. I have no doubt about that.” (“With Negative Rates, Why Would You Not Trade Paper Money for Gold?” Kitco, 1/29/15.)
Bond Expert: “I’m bullish on gold.”
Bond expert Jefferey Gundlach warned investors that Fed policy could devastate the U.S. economy, stating that gold remains an important barometer of troubled times.
“’There was a year, 1937, when the Federal Reserve tightened credit conditions prematurely and it led to the second leg of the Great Depression,’ said Gundlach, who confessed to being ‘worried’ that the Fed would do the same thing even though there are no inflationary pressures that would indicate a need for tightening.”
Gundlach “sees gold, a traditional inflation hedge, as another positive story for 2015. ‘Gold does act as a safe haven, and it seems like gold is predicting trouble correctly,’ he said. ‘I’m bullish on gold. I increased my position in gold a couple weeks ago.’ (Gundlach: Fed should hold line, ECB QE will fail – CNBC 1.27.15)
Goldcorp: 2015 is the Year of “Peak Gold”
Goldcorp President and CEO Chuck Jeannes, told mining industry insiders the world is a peak gold supply, leading to higher gold prices.
“Goldcorp president and CEO Chuck Jeannes made the case that the world is at ‘peak gold supply’ and the price of the precious metal will hereafter be supported by steadily declining production… ‘Our industry is never again going to mine as much gold as we do this year,’ said Jeannes, who runs the world’s largest gold producer by market capitalization…Jeannes also noted how the average time to bring a gold discovery into production is now around 20 years…”
“’I believe there’s a floor under the gold price between $1,100 and $1,200,’ Jeannes said, largely due to demand for physical gold in China whenever the price dips below that level.” (The World’s Largest Gold Company Says 2015 Is The Year Of Peak Gold,” Canadian Business, 1/29/15.)
Goldline’s Express IRA® Program
Many Goldline clients choose to include precious metals as part of their retirement planning especially during times of economic crisis and uncertainty.* Goldline’s Express IRA® allows clients to acquire precious metals on their schedule; they no longer have to wait for your self-directed IRA to be funded before getting started.
Goldline's Express IRA® not only provides clients with the ability to diversify their IRA on an expedited basis, clients can also qualify for Goldline's ground-breaking Two-Way Price Guarantee Program℠ when they acquire $10,000 or more of our exclusive bullion coins. When an Express IRA® purchase qualifies for Goldline's Two-Way Price Guarantee Program℠ clients are protected on short-term upside and downside market movement: they can either call to reprice their coins if the selling price falls (up to a maximum of 28 days depending on the size of the purchase) or, if the selling price of the coins increase during the qualifying period, clients can call Goldline to acquire additional coins at the original selling price.
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: