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Goldline Week in Review

Release Date:  Saturday, November 16, 2019
WEEKLY SPECIAL

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 METALS MARKET UPDATE – WHAT YOU NEED TO KNOW
  • Gold prices were moderately lower in Friday morning trading on a mix of economic news. 
  • Retail sales were slightly higher than expected but the manufacturing report was significantly lower from October.
  • U.S.-China trade discussions have slowed but at least one commentator is stating the real risk to the world economy is the economic slowdown in China.
  • Gold ended the week at $1,468.90/oz. Silver closed at $17.04/oz.

https://www.kitco.com/news/2019-11-15/Gold-prices-down-on-busy-U-S-data-day.html

METALS NEWS –

Current gold prices offer buying opportunity especially considering analyst forecasts of significantly higher prices in the future.

  • An economic downturn similar to the 2008 recession could send gold to $8,000 reports Nicoya Research. "The current bull market cycle in gold is nearly four years old but hasn't broken out of the gates yet. The 40% move higher since the start of 2016 is a modest advance relative to the last two bull markets… The price would still need to go up roughly 15x (1,400%) to match the 1970's bull market, which would take the price to over $22,000! Or it would need to go up another 5.5x (450%) to $8,000 to match the magnitude of gains from the 2001-2011 bull market. Put simply, the gold price has an explosive move ahead if the current bull cycle is to come anywhere close to the magnitude of the past two bull cycles." https://nicoyaresearch.com/gold-price-8000/
  • Investment "guru" Mark Mobius sees gold prices doubling over the next ten years as countries continue to devalue their currencies. "'People ask me what is your target for 10 years, I would say it will be double the price it is now … I am bullish on gold. I am not saying that gold is not going to go down because it is going to fluctuate, but people should have at least 10 percent of their portfolio in physical gold … You add that to the fact that the Europeans and the Americans and other countries have been printing like crazy, means that money supply has gone through the roof and therefore the value of gold has to increase because it is a kind of a currency with limited supply….'" https://www.newsmax.com/finance/markets/mark-mobius-gold-price-double/2019/11/12/id/941319/
  • Saxo Bank's head of commodity strategy believes the global trade war could send gold prices to $1700 in 2020. "Gold has been performing very well over the course of the year as global economic uncertainty and fears over a trade war have supported the precious metal – traditionally viewed as a safe haven investment by the investor community. 'I think the low point in growth is still in front of us, not behind us, and that may also lead to further gold appreciation,' said Ole Hansen, head of commodity strategy at Saxo Bank. The price of gold could increase by up to 10-15 percent next year, towards $1,700 per ounce, Hansen said, adding that the commodity could keep going higher over the coming years."  http://english.alarabiya.net/en/business/markets/2019/11/10/Gold-could-hit-1-700-by-early-2020-Analysts.html
  • The CEO of Agnico Eagle Mines Ltd. forecasts gold to reach a new record high of $2,000 per ounce in the next 2-3 years.  "Agnico Eagle Mines Ltd. Chief Executive Officer Sean Boyd expects gold prices to continue to strengthen amid global economic uncertainty and deficit spending, and the metal may hit a record $2,000 an ounce in the next two to three years. 'Governments focus on running a deficit budget and spending; that lose money approach is good for gold….'" https://www.newsmax.com/finance/markets/gold-record-price-rally/2019/10/24/id/938564/
  • Gold's recent consolidation provides a buy opportunity for investors reported Yahoo! Finance. "[R]ecent softness in gold prices may be a good entry point. Trade-related conflict between the United States and China is far from being completely settled. Meanwhile, a slowing pace of U.S. economic growth and global economic downturn are near-term concerns."  https://finance.yahoo.com/news/recent-softness-gold-price-makes-124312786.html
  • Serbia purchased over $1 billion worth of gold to enhance its financial stability. "Serbia's central bank bought nine tons of gold in October, raising its reserves of the precious metal on the advice of President Aleksandar Vucic. The biggest former Yugoslav republic is following Hungary and Poland, where officials boosted gold reserves in 2018 to create a bulwark against crisis. Central Bank Governor Jorgovanka Tabakovic, a member of Vucic's Progressive Party, said the October 9-11 purchases raised the bank's gold holdings to 10% of total reserves and made good on a suggestion from the president in May. 'We have completed gold purchase transactions and Serbia is safer today with 30.4 tons of gold worth around 1.3 billion euros ($1.4 billion)….'" https://www.bnnbloomberg.ca/serbia-buys-nine-tons-of-gold-to-heed-president-s-crisis-advice-1.1348044
ECONOMIC NEWS –

A majority of the top investors see a stock market plummet in 2020 while the Fed warns that crippling debt may prevent its ability to blunt the economic slowdown. 

  • More than half of the richest investors believe the stock market will plummet in 2020 according to a survey by UBS. "A majority of the most wealthy investors around the world are bracing for a big sell-off next year, according to a UBS survey. Fifty-five percent of more than 3,400 high net worth investors surveyed by UBS expect a significant drop in the markets at some point in 2020. Amid intensifying geopolitical risks, the super rich have increased their cash holding to 25% of their average assets, the survey showed." https://www.cnbc.com/2019/11/12/more-than-half-of-the-richest-investors-see-a-big-market-drop-in-2020.html
  • Hope for a resolution of the U.S. China trade war dimmed as a number of key issues remain unresolved. "The high-stakes trade negotiations between the U.S. and China are running into trouble as the two countries attempt to finalize a limited trade agreement. The U.S. is trying to secure stronger concessions from China to regulate intellectual property protections and to stop the practice of forced technology transfer in exchange for rolling back some of the tariffs, CNBC's Kayla Tausche reported, citing people familiar with the matter. The two sides are at a stalemate even though the U.S. and China said they had an agreement in principle less than a month ago." https://www.cnbc.com/2019/11/13/us-china-trade-talks-hit-snag-over-agriculture-purchases-other-issues-according-to-report.html
  • Economist Noel Perry predicts the U.S. economy will enter into recession by the third quarter of 2020. "The slowdown we have already seen, which is a fact in both manufacturing and trucking in 2019, is typical of the year before a recession. So, yes, I am specifically forecasting a recession beginning in the third quarter of 2020….'"              https://www.ttnews.com/articles/economist-noel-perry-sees-us-recession-looming-late-2020
  • Jim Cramer told his "Mad Money" viewers that the U.S. China trade wars could go on for years. "The U.S.-China trade war continue on for a significant time if Beijing does not agree to start buying considerable amounts of American goods, CNBC's Jim Cramer said Thursday… 'How can they get a deal? I think they need to start buying American goods like tomorrow, to show Trump that the free-traders have a point and their strategy can still work … Otherwise, the hardliners win, the trade war keeps dragging on and ... depending on what happens in the election, it could go on for years,' Cramer added." https://www.cnbc.com/2019/11/14/jim-cramer-why-the-us-china-trade-war-could-go-on-for-years.html
  • Jobless claims rose to their highest level for the past five months. "Applications to collect unemployment benefits rose last week to the highest level since the end of June, topping all economists' forecasts. Jobless claims increased by 14,000 to 225,000 in the week ended Nov. 9, Labor Department data showed on Thursday. The figure reflected estimates of filings for five states and Puerto Rico, a greater number than is typical, because of the Veterans' Day holiday on Monday." https://finance.yahoo.com/news/jobless-claims-u-climb-highest-134036368.html