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Gold prices continued to climb this week to make June one of the best months in the last three years.
"Gold prices edged up on Friday amid doubts a highly anticipated meeting between the United States and China would ease trade tensions, driving bullion to its best month in three years…
Gold has risen nearly 8.4% so far this month, on track for its biggest monthly percentage gain since June 2016. The metal is also set to post its sixth consecutive weekly rise, having gained 1.1% so far this week… Gold prices have gained more than $80 in the last two weeks, mainly on expectations that there will be at least a quarter percentage point rate reduction in July by the Fed.
"'The sustained decline in rates is a key factor (for gold), particularly as the Fed shifts to a more dovish stance," UBS analysts said in a note, raising their three-month gold price target to $1,430 from $1,380. 'Uncertainty around growth and trade risks suggests more strategic positions are likely to be built...'" ("Gold gains on U.S.-China trade jitters; heads for best month in 3 years," Reuters, 6/28/19; emphasis added.)
Gold ended the week at $1,409.90/oz. Silver closed at $15.39/oz.
Forbes commentator Naeem Aslam explained why fundamentals will send gold prices "easily" above $1500 per ounce in the next few months.
"The shine is back for the precious metal which is trading up nearly 11.4 percent year to date... It is set to record the best monthly gain of 9.49 percent since February 2016…This is mainly due to the following factors:
"Let's start with the monetary policy first. The dollar index is set to record the biggest monthly loss since 2018. The dollar index, DXY, is down nearly -1.85 percent this month, and this weakness has given birth to a bull rally for the shining metal…
"Another reason for the gold price to move higher is the heightened geopolitical uncertainty in the Middle East… Iran has said at the door is shut for any diplomatic path and this means the uncertainty may well continue to rise. This is likely to keep pushing the gold price higher and it can easily cross the level of $1,500.
"An important factor which investors should be paying attention to is the correlation between the gold price and the size of the negative-yield debt… [T]here is a strong correlation which means that the gold price rises as the size of the negative yield debt increases… The safer bet is the shining metal. Given the current monetary policy adopted by the European Central Bank and the Federal Reserve bank, it is likely that the gold price may actually touch 1550 in the next few months... ("Why Gold Price Is Likely To Touch $1,550," Forbes, 6/35/19; emphasis added.)
CNBC reported on gold's breakout and why analysts see a "big" second half for the yellow metal including a retest of gold's record high.
"Investors are piling into gold, sending the precious metal to a six-year high on Tuesday, and analysts think the commodity has established a "base" to go even higher… 'Bigger picture though, given the magnitude of the base, which has taken six years to form, we suspect we could even see a retest of the $1,921 record high,' David Sneddon, global head of technical analysis at Credit Suisse, said in a note to clients Monday. Sneddon said gold has established a multiyear base that could provide the platform for a 'significant and long-lasting rally' for the precious metal…
Morgan Stanley's commodity strategist Susan Bates said gold is the firm's No. 1 commodity pick. 'Morgan Stanley's forecasts of falling real rates and a bearish US dollar outlook, against an uncertain macroeconomic outlook, should lend significant upside to gold's price through 2H19 and into 1H20,' Bates said in a note Monday. The metal is seen as a safe haven and store of value during times of a weakening dollar, slowing economic activity and increased geopolitical tensions." ("Gold investors have been waiting a long time for this breakout moment and it's happening, 6/25/19; emphasis added.)
Yahoo! Finance reported the growing trade war with China and Federal Reserve policies will bolster gold prices with investment bankers such as Goldman Sachs raising their price forecasts.
"In case you have been living under a giant gold rock, the price of the yellow metal has surged about 11% to $1,413 an ounce in the past 30 days. Credit for the out-of-the-blue rise … goes to President Donald Trump and his hand-picked Federal Reserve Chair Jerome Powell.
"The administration's escalating trade war with China has sent investors piling into the often viewed safe haven, gold. Meanwhile, thinly veiled promises by Fed officials since May have sent the U.S. dollar tanking. As is normally the case, when the dollar weakens considerably investors flock to gold as it's seen as a store of value…
"[GraniteShares CEO Will] Rhind doesn't rule out gold prices above $1,500 an ounce in short order, but concedes to not having a price target. Goldman Sachs is on board with that analysis, too. Analysts at the investment bank wrote in a new note Wednesday that a combination of a weak dollar and rising global uncertainties could keep gold prices hot. Goldman raised its 12-month gold price forecast to $1,475 an ounce from $1,425 an ounce. 'Goldman could be conservative at this stage,' Rhind said." ("Why Trump and Powell will send gold prices skyrocketing," 6/26/19; emphasis added.)
Egon von Greyerz, Founder and Managing Partner of Matterhorn Asset Management, discussed gold's breakout and why investors need gold as protection against the coming economic crisis.
"Finally it happened although it took 6 long years to break through The Gold Maginot Line at $1,350! … But we must remember that the rising gold price is a warning signal for the coming economic crisis…
"Yes, gold will go quickly to $1,650+ on its way to new highs and far above that. As I have said many times, we will see levels that no one can imagine today… The precious metals rally hasn't really started yet… When gold reaches $2,000, silver should reach $66. But that is only the beginning…
"Many savvy investors are now talking about gold and the potential for much higher prices, just as I have done above. But we must remember that we are not holding gold as an investment but for wealth preservation purposes in order to protect against a rotten financial system, and a bankrupt global economy.
"Gold is not held for short term gains but as insurance against the massive risks we see in the system. We are not in gold to take part in a price move. Instead, gold is the consequence of our analysis of global risk which is at an extreme. At the same time as many impatient holders of gold are now rejoicing over the price move, we must remember that the very strong rise of gold that we are about to see, is a warning signal of very difficult times ahead in the world which I have been discussing many times. I obviously don't want to be a joy killer so let's enjoy this first proper rally for six years…
"Markets in the next few months will be extremely volatile. The US stock market is still in its final hurrah stage when any news is good news. Potentially lower rates due to a slowing economy should be very bearish for stocks but not in this final euphoric phase. US stocks as well as global markets are finishing their final moves up before a long term secular bear market starts. The fall could begin in the next few weeks or possibly take as long as 2-3 months. Before the decline is finished, we should see a fall of at least 90%, in real terms, just like in 1929-31…
"The next crisis for the world is likely to start in the autumn of 2019. It will be a continuation of the 2006-9 crisis which was never solved but just postponed. This time the world is starting with a debt of $240 trillion, over twice the debt level of 2006. And risk is exponentially higher than last time…
"Whatever the catalyst is, it will lead to panic in markets with confidence evaporating and fear setting in. Now is the time to prepare for this. It will soon be too late. Physical gold should be part of everyone's wealth preservation strategy." ("Gold Price Signals Next Global Crisis," Gold-Eagle News, 6/27/19.)
U.S. asset manager VanEck told investors that several factors are signally gold's new bull market.
"We have talked frequently about the fundamental and technical importance of the $1,365 per ounce level for gold, which has roughly been the top of its trading range for the past six years. Last week gold spiked above $1,400/oz—a move driven by a change in the U.S. Federal Reserve's (Fed's) outlook that increases the chances for a series of rate cuts to stimulate both the economy and inflation…
"If gold holds above the $1,400/oz trading level over the course of this week, we believe there is a very good chance that this could mark the beginning of a new gold bull market. In any case, it appears gold has entered a higher trading range.
The shift in central bank policies denotes a change in the macroeconomic environment that brings new levels of risk to the financial system. Central banks see a downturn coming. However, many investors believe they have limited ability to fight a recession with U.S. interest rates already at 2% and European interest rates below 0%. In addition, quantitative easing has lost its efficacy. Layer on global trade and geopolitical tensions, and it is not hard to imagine a 'flight to safety' that moves gold much higher.
"The U.S. stock market's blind faith in the Fed's policies is pushing the market back to its highs. This makes the market vulnerable to weak economic news or any signs that indicate the Fed is unable to curtail a downturn. We believe any stock market selloffs should further propel gold as investors move away from risk..." ("Gold Reestablishes Its Brilliance," VanEck Gold Market Report, 6/24/19; emphasis added.)
The financial website Moneyweb discussed the new bull market including Citigroup's forecast of gold prices potentially reaching $1500 to $1600 in the next twelve months.
"Bullion has regained its lustre after the Fed signalled it was ready for looser policy and the European Central Bank hinted at possible stimulus, which would keep real rates low, while geopolitical risks boosted demand for havens. Citigroup Inc. said Thursday that the enthusiasm is justified, with $1 500 to $1 600 an ounce possible in the next 12 months under a bullish-case scenario that includes borrowing costs falling below zero.
"'Gold bulls are back in control,' Edward Moya, senior market analyst at Oanda, said in a note, adding the metal remains supported by rising expectations of a 50 basis point cut at the Fed's July meeting. 'The question is no longer will the Fed ease, but by how much? The Fed historically likes to kick on an easing cycle with a bang and a 50 basis point cut should become the base case...'
"Recent US dollar weakness and more speculative money moving into bullion are among the factors that suggest gold has more upside than downside, Martin Lakos, division director at Macquarie Wealth Management, said in a Bloomberg TV interview. The bank forecasts $1 450 by the first or second quarter of next year, he said."
("Gold gains to near highest since 2013 as bulls 'back in control'," Moneyweb 6/24/19; emphasis added.)