Displaying items by tag: silver

(New York)

Wells Fargo’s head of real asset strategy John LaForge says gold could hit…see the full story on our partner Magnifi’s site

(New York)

It took almost ten years, but gold finally just passed its nominal all-time high (set way back in 2011 during the European debt crisis). That is not a good sign for the market. Gold is rising because of increasing worries about a prolonged economic downturn caused by a renewed COVID second wave. Gold hit $1,944 per troy ounce today, cruising past its previous high of $1,921 per ounce. “Gold has finally come on to Main Street as an asset people actually need to have”, says the CEO of Sprott, a precious metals specialist.

FINSUM: Gold has been helped by fears over the economy, and the fact that rates are near zero, which flatters zero-yielding gold.

(New York)

There have been two huge beneficiaries of the increased tensions with Iran in recent days: oil and gold. The shiny metal is now at its highest level since 2013 at almost $1,600 per ounce. The difference between the two is that gold seems likelier to stay elevated. Goldman Sachs argues oil would actually need a physical disruption to supply in order to stay elevated, while historically gold is likely to keep rising. According to the bank, “In contrast, history shows that under most outcomes gold will probably rally to well beyond current levels”, says Goldman’s head of commodities research.

FINSUM: Gold certainly has a longer runway than oil for staying high as its rise in prices has nothing to do with a possible supply disruption, which means one doesn’t need to materialize in order for prices to keep moving higher.

(New York)

One of the biggest banks on Wall Street has just made a bold call on gold. Citi says that the precious metal is likely to shoot to $2,000 or more within the next 24 months. The bank argues that a dovish cutting cycle by the Fed will be a catalyst for price gains, which will be supported by a weakening economy and worries over the trade war. According to Citi, “We expect spot gold prices to trade stronger for longer . . . posting new cyclical highs at some point in the next year or two”. Standard Chartered, another big bank, also made the interesting comment that “It does seem that gold’s status within the portfolio has been reignited”.

FINSUM: The most interesting comment here is about gold’s role in a portfolio. For many years it seemed that investors had forgotten about gold’s role in diversification, but it finally seems to have made a comeback.

(New York)

Gold just took the jobs report on the chin. As our readers will know, the US jobs report from Friday was nothing short of stellar, with the job creation numbers blowing away all expectations, and in doing so, lowering the odds and potential pace of Fed rate cuts. That led to a big sell-off in gold on Friday that followed an even larger one Monday. Gold lost almost 4% over just two days last week.

FINSUM: The jobs report simultaneously sapped gold of the fear boost it gets from worries about the economy, as well as the potential benefit of lower rates.