Smart Money Buying Gold - Visual Capitalist

Release Date: 
Friday, June 9, 2017

A stronger dollar weighed down gold prices this week despite continued global uncertainty.

"Gold futures traded slightly lower Friday, on track to notch a third straight decline and a weekly price drop, despite a stretch of trade fraught with the type of political drama that would ordinarily have offered a boost to precious metals that thrive on uncertainty... Friday's moves in metals come after the U.K. parliamentary elections late Thursday delivered a stunning result: a hung parliament, in which neither Conservative nor Labour Party holds a parliamentary majority... Against that backdrop, however, gold has dipped into the red, with the dollar, as measured by the ICE U.S… 'Focus is now turning to next week's [Fed policy setting committee] meeting on Tuesday and Wednesday, at which time the Federal Reserve is expected to slightly raise U.S. interest rates, Wyckoff said. "Bottom line from a markets and trader perspective: Gold is seeing normal profit-taking and some chart consolidation after hitting a for-the-move high earlier this week. I look for more upside next week….'" he said. ("Gold flirts with first 3-session skid in a month as dollar strengthens," MarketWatch, 6/9/17.)

Gold ended the week down $12.10, closing at $1,267.40. Silver prices closed at $17.27,down $0.36.

Smart Money Buying Gold - Visual Capitalist
The financial website Visual Capitalist discussed why sophisticated money managers were including gold in their portfolios.

"There are always lessons that can be learned from the 'smart money'. Unlike regular investors, billionaire money managers like Ray Dalio and Stan Druckenmiller are professional investors. They have entire institutional teams at their disposal, dive deep into the nuances and complexities of the market, and spend every waking moment of their lives thinking about how to get more from their investments.

"They want to make money - but they also want to execute on strategies that will protect their wealth and build robust portfolios that can withstand any type of macro event.
In recent months, some of these elite investors have turned to pecious metals like gold as a part of their overall investment strategies…

"Why are these billionaires buying precious metals? Their cited reasons can basically be summed up with six categories: wealth preservation, store of value, inflation hedge, portfolio diversification, future upside, and investment fundamentals…." ("Why the World's Billionaire Investors Buy Precious Metals," Visual Capitalist, 6/7/17.)

Macroeconomic Factors Support Gold - UBS
UBS identified the factors which will continue gold prices.

"The macroeconomic forces justify the strength in gold since mid-May. 'In particular, lower rates, weaker dollar and broader uncertainty provide a good foundation for the market to continue its journey higher, said UBS in a snippet… 'We've argued gold's role as a diversifier in investor portfolios, and this is becoming increasingly relevant in the current environment…' While a pause is understandable around key resistance levels and ahead of key events in the near term, UBS thinks the market should stay supported overall and would view dips as an opportunity to build/add to positions." ("Macro conditions support higher Gold prices," Scrap Register, 6/9/17.)

Markets At Highest Risk Since 2008 Crisis - Gross
Bond fund manager Bill Gross is warning investors that U.S. markets are facing their greatest risks since the Great Recession.

"U.S. markets are at their highest risk levels since before the 2008 financial crisis because investors are paying a high price for the chances they're taking, according to Bill Gross, manager of the $2 billion Janus Henderson Global Unconstrained Bond Fund.

"'Instead of buying low and selling high, you're buying high and crossing your fingers,' Gross, 73, said Wednesday at the Bloomberg Invest New York summit. Central bank policies for low-and negative-interest rates are artificially driving up asset prices while creating little growth in the real economy and punishing individual savers, banks and insurance companies, according to Gross…. ("Bill Gross Says Market Risk Is Highest Since Pre-2008 Crisis," Bloomberg, 6/7/17.)

Market Crash Coming - Rogers
Author and financial analyst Jim Rogers is forecasting the greatest market crash he's ever experienced in his 70+ years.

"Legendary investor Jim Rogers sat down with Business Insider CEO Henry Blodget on this week's episode of 'The Bottom Line.' Rogers predicts a market crash in the next few years, one that he says will rival anything he has seen in his lifetime …

"'It's going to be the biggest in my lifetime and I'm older than you. No, it's going to be serious stuff. We've had financial problems in America -- let's use America -- every four to seven years, since the beginning of the republic. Well, it's been over eight since the last one. This is the longest or second longest in recorded history, so it's coming. And the next time it comes -- you know, in 2008, we had a problem because of debt. Henry, the debt now -- that debt is nothing compared to what's happening now. In 2008, the Chinese had a lot of money saved for a rainy day. It started raining. They started spending the money. Now, even the Chinese have debt and the debt is much higher. The federal reserves, the central bank in America, the balance sheet is up over five times, since 2008. It's going to be the worst in your lifetime, my lifetime too. Be worried…

"'You're going to see countries fail, this time around. Iceland failed last time. Other countries fail. You're going to see more of that. You're going to see parties disappear. You're going to see institutions that have been around for a long time -- Lehman Brothers had been around over 150 years. Gone. Not even a memory for most people. You're going to see a lot more of that next around, whether it's museums or hospitals or universities or financial firms.'" ("JIM ROGERS: The worst crash in our lifetime is coming," Business Insider, 6/89/17.)

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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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