McEwen: $5,000 Gold

Release Date: 
Friday, August 15, 2014

Gold and Silver Prices

Gold prices moved lower this week in a choppy week of trading as softer than expected U.S. economic data was released and geopolitical tensions resurfaced. “Gold prices were slightly lower on Friday, paring losses on safe-haven buying as equity markets slid after Ukraine said its forces had engaged a Russian armored column on Ukrainian soil in what appeared to be a major military escalation…Investors bought bullion and U.S. Treasuries after Ukraine said its forces had attacked and partly destroyed a Russian armored column that crossed into Ukrainian territory. Moscow said its forces had not crossed into Ukraine, and accused Kiev of trying to sabotage deliveries of aid. ‘The news definitely helps gold reverse higher and shows that gold is very susceptible to geopolitical tensions,’ said Phillip Streible, senior commodities broker at RJ O'Brien.” (“Gold cuts losses on renewed Russian-Ukraine tensions,” Reuters, 8/15/14.)

Gold finished the week at $1,305.50, closing down $4.60. Silver prices closed the week down $0.60, at $19.65.

McEwen: $5,000 Gold

Mining executive and founder of McEwen Mining, Robert McEwen, said to CNBC he expects gold prices to ultimately reach $5,000 per ounce.

“‘I'm a long term believer in gold and I see it ultimately getting to $5,000 an ounce,’ McEwen said on CNBC's ‘Fast Money.’ ‘Anything short of that, I wouldn't be hedging.’ McEwen, who owns 25 percent of his company and receives no salary, said that he expects gold to hit his price target of $5,000 in the next three to four years.” (“Gold going to $5,000 per ounce: Mining executive” CNBC, 8/13/14.)

Hedge Fund Manager: Own Gold to Create “All-Weather Portfolio”

The manager of $93 billion First Eagle Global Value Fund, Matt McLennan, told investors that gold is an important part of an “all weather portfolio.”

“‘The goal for us is to create an all-weather portfolio,’ he said. ‘And I think what I'd say is that we're in an environment where risk assets are trading at rather-elevated levels relative to history on the back of very easy policy. We live in a world where there's too much debt and not enough jobs, and that's leading to financial repression everywhere…And in a world of monetary abundance, we're looking for scarcity, be it in businesses that have hard-to-replicate assets or business models, or in gold itself as nature's alternative to the man-made financial architecture.’” (“Gold just part of a weatherproof portfolio: Pro,” CNBC, 8/13/14.)

Aden Sisters: Gold Poised for a “Super Take Off Rise”

Noted analysts and publishers of the Aden Forecast, Mary Anne and Pamela Aden explained to subscribers why gold and silver may be poised to rise dramatically.

“We have felt (and still do) that this year could well be the turnaround year for the gold market…August started with growing geopolitical tensions. Gold jumped up once again on safe haven buying due to escalating tensions between Ukraine-Russia and Iraq. Plus, money moved into gold from the falling stock market. Gold and the dollar normally move in opposite directions, but geopolitical tensions are causing both to rise from different angles. The dollar gained because the euro has become vulnerable due to Ukraine. It’s affecting their economy, while the U.S. is looking better than most of the world for the time being.”

“Gold is currently trying to stay above $1300, its 65 week moving average, showing firmness. Once gold closes above step 1, the August 2013 high near $1420, it will pass the first key hurdle. It’ll then have accomplished a complete bottom area, it’ll be above its 65 week moving average as well as its 23 month average…Step 2 will then be the next hurdle to overcome. This $1536 level was the key bottom area after gold peaked in 2011…Once this level is surpassed, gold will have recovered from the vicious part of the decline, and it’d be another bullish factor for gold’s rise. From there, the $1800 level will be the next hurdle, which was gold’s second gold peak area in 2012. The record high area near $1905 will be the final obstacle. Once a new record high is reached, gold will be poised for a super take off rise.” (“The Aden Forecast—August 2014,” Aden Forecast, 8/13/14.)

Fed Official Unsure About Economic Recovery

Federal Reserve official Stanley Fischer painted a grim financial picture for the global economy.

“Sounding a somber note even as the economic outlook in the United States brightens, the Federal Reserve’s No. 2 official acknowledged on Monday that global growth had been ‘disappointing’ and warned of fundamental headwinds that might temper future gains. The official, Stanley Fischer, who took over as vice chairman of the Fed in June, noted that although the weak recovery might simply be fallout from the financial crisis and the recession, ‘it is also possible that the underperformance reflects a more structural, longer-term shift in the global economy...Year after year, we have had to explain from midyear on why the global growth rate has been lower than predicted as little as two quarters back...This slowing is broad-based, with performance in emerging Asia, importantly China, stepping down sharply from the postcrisis surge, to rates significantly below the average pace in the decade before the crisis.’” (“Fed Official Warns ‘Disappointing’ Growth Could Foretell Future,” New York Times, 8/11/14.)

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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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