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Sprott’s Oliver Sees $5,000 Gold

Release Date: 
Friday, March 14, 2014

Gold and Silver Prices

Gold prices were moved higher this week as the Russia-Ukraine crisis appears headed for a flashpoint with Crimea’s referendum on Sunday to leave Ukaine and join the Russian federation. “The Russian troop occupation of Ukraine is a growing concern among many traders and investors. U.S. and European Union leaders are threatening to impose economic and diplomatic sanctions on Russia. Meantime, Russia said it will do the same to the U.S. and EU. A referendum from Crimean citizens on secession is scheduled for Sunday, and that could be the next flashpoint in the region. It would not be surprising to see keener risk-aversion in the market place on Friday, heading into an uncertain weekend for Ukraine. It could be that markets will be stressed come Monday morning, if the Ukraine crisis escalates during the weekend. The Russian occupation of Crimea has been a bullish factor for the gold market.” (“Gold Ends Firmer, Hits 6-Month High; Uncertain Weekend Looms,” Kitco News, 3/13/14.)

Gold closed the week at $1,383.00, up $42.50. In the past thirty days, gold prices have gained more than $80, a gain of over 6%. Silver prices closed up $0.57, finishing the week at $21.56.

Sprott’s Oliver Sees $5,000 Gold

“Charles Oliver joined Sprott Asset Management LP in January 2008. He focuses on gold and silver investments as a portfolio manager for the Sprott Gold & Precious Minerals Fund and the Silver Equities Class…‘Ultimately, I believe that the gold price could reach $5,000 within a few years, and perhaps go well beyond. Deficits and rising debts, exacerbated by demographic issues, are here to stay. And money printing and higher gold demand along with them.’” (“Charles Oliver: Gold to 5,000 within a few Years,” Sprott Asset Management, 3/11/14.)

Aden Sisters: “Buy and Hold” Gold; Silver Could “Explode Upward”

Noted analysts and newsletter writers Mary Anne and Pamela Aden outlined their reasons for owning gold and silver in their most recent Aden Forecast. “Gold has been rising steadily since the start of the year…The emerging market turmoil in January got the safe haven ball rolling. The slowing U.S. economy then added another boost, especially with Yellen keeping the same policies as Bernanke. And now geopolitical concerns, like the crisis in Ukraine, is giving gold yet another safe haven push upward. Plus, with the U.S. dollar under pressure, while interest rates stay low, it’s also bullish for gold. Overall, physical demand and economic jitters are boosting the gold price.”

“Gold’s been trying to bottom since last June, and this year’s rise is reinforcing the bottom…So far its 13+% rise looks good and gold is strong above $1300. Gold could now easily rise further to test its August high near $1420…we recommend buying and holding gold. We also like silver…silver has a solid base at $20, and its indicators are poised to rise…Once silver closes above $23…we could see silver explode upward.” (“Aden Forecast—March 2014,” Aden Forecast, 3/11/14.)

Coutts: Gold is “Store of Value”

RBS’ private banking division, Coutts & Co., is diversifying investor portfolios with gold.

“Coutts & Co. is adding gold for investors as rising wealth in China and increasing political risks including in Ukraine spur demand, helping prices rally from the biggest annual decline in more than three decades...‘There’s a real robustness to physical demand and the spark that we got from Ukraine took us to a spike,’ [CIO Gary] Dugan said in an interview…‘But even before that, there was genuine demand from our clients to diversify their wealth into a greater fraction to gold…I still think there are tension points around the world,’ he said, citing Ukraine as well as strained relations between China and Japan. ‘Because it’s an insurance policy, you try and buy it cheap, you don’t ever rush in.’”

“Bullion provided a ‘good counterbalance’ to the rout in emerging-market assets precipitated by the reduction in U.S. stimulus, said Dugan. ‘Tapering was more a reflection of the end of the global financial crisis, but people realized that even if we like to think that the financial crisis is over, what we have left is a legacy of huge amounts of debt and economies that still struggle to get much momentum. The idea that you make an extraordinary gain from gold has changed,’ said Coutts’ Dugan. ‘Many people have gone back to thinking of it as a store of value.’” (“Coutts Adds Gold as Demand in China Climbs With Ukraine Risk,” Bloomberg, 3/10/14.)

UBS: Gold Prices Up as Investors Seek “Safe Haven” Asset

UBS noted that gold and silver are benefiting from their traditional role as a safe haven asset. “The rally in gold continues, with the yellow metal and silver benefitting from safe-haven bids, says UBS. Recent news out of China has offered a bid, including the first corporate bond failure in the country, disappointing credit growth for February, weakness in China’s currency and a sharp decline in copper prices that spooked investors, UBS says. Meanwhile, a Group of Seven statement on Wednesday denounced a Crimean referendum on joining Russia and the European Union is reportedly preparing sanctions against Russia. ‘Concerns that current issues in China could morph into something more sinister for the economy and continued tensions between the West and Russia are helping gold make the most of its role as an insurance against tail risks,’ UBS says. ‘Gold prices continue to head north in the slow and orderly fashion that has been evident so far this year.’” (“UBS: Gold Continues To Draw Safe-Haven Bid,” Kitco News, 3/13/14.)

Citi: Global Environment Favorable to Gold

Sterling Smith, futures specialist with Citi Institutional Client Group, told Kitco News about the factors that are driving higher gold prices.

“‘We have a number of things here working to press the gold higher,’ said Sterling Smith…‘One is an improving technical picture. The market has done a pretty good job of shaking off the downward momentum we had seen up until the end of the year. The Crimean situation, which continues to decay, is certainly being quite supportive. And if you throw in concerns about the possibility of deflation in Europe and an economic slowdown in China, which could result in easing of policy there, you’re beginning to develop an environment globally that is favorable for gold.’” (“Ukrainian Tensions, Technical Buying Propel Gold To 6-Month High,” Kitco News, 3/14/14.)

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:

*Federal IRA tax laws are complex and may change from year to year. Goldline believes it is appropriate to have 5%-20% of retirement portfolio allocated to precious metals. Other individuals and institutions may recommend different percentages. As with any investment, you should consult your tax advisor before making a decision regarding precious metals IRA investments.

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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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