Bonus Platinum!Release Date: Saturday, September 7, 2019
METALS MARKET UPDATE – WHAT YOU NEED TO KNOW
- Gold prices moved higher in early trading on Friday after a "tepid" employment report.
- Non-farm payroll numbers missed market expectations by 20,000 jobs.
- The disappointing employment report may encourage the Federal Reserve to continue interest rate cuts which is bullish for gold.
- Gold ended the week at $1,507.20/oz. Silver closed at $18.32/oz.
(Gold prices push higher following tepid US jobs data," Kitco, 9/6/19.)
METALS NEWS – ANALYSTS SEE NEW RECORD HIGHS AS INVESTORS CONTINUE TO BUY GOLD
Both individual and institutional investors continue their gold buying spree as a number of analysts are forecasting new record highs for gold.
- JP Morgan analysts are gold bull market that will send prices above the prior record of $1900 per ounce. "The gold market could be due a major breakout in the coming year as fears escalate the US economy will slide into recession, according to a report by JP Morgan Cazenove. The bank's gold analysts John Bridges and Siddharth Mishra, writing ahead of the Denver Gold Show, scheduled to begin on September 15, said economic conditions may see gold purchases similar in scope to 2008 when the metal's price moved through $1,900 per ounce." https://www.miningmx.com/news/gold/38292-gold-may-be-heading-for-decade-long-bull-phase-as-recession-evokes-stimulus-of-2008/
- The principal analyst and editor of the financial website IndependentSpeculator.com, commented on the rare phenomenon of both gold and the US Dollar rising and why this is bullish for gold. "The extraordinary rarity of the current circumstance—a volatile but sustained move into both gold and the USD—tells me that something big is going on. And even more striking is that gold is rising much faster than the USD. The gold line is accelerating upward while the USD line is decelerating. If those curves continue, the USD will be falling hard and gold will be hitting new nominal highs within two years. https://www.kitco.com/commentaries/2019-09-05/The-US-dollar-vs-Gold-has-something-changed.html
- Gold to $10,000 per ounce? U.S. Global Investors CEO Frank Holmes believes economic factors could propel gold to this record high. "Extremely dovish monetary policies around the world and economic conditions could propel gold prices much higher, to even $10,000 over the long-term." https://www.kitco.com/news/video/show/Kitco-NEWS/2535/2019-09-05/Gold-price-at-$10000-is-not-crazy-talk-says-Frank-Holmes#_48_INSTANCE_puYLh9Vd66QY_=https%3A%2F%2Fwww.kitco.com%2Fnews%2Fvideo%2Flatest%3Fshow%3DKitco-NEWS
- Billionaire investor and CEO of Leagold, Frank Giustra, says gold is moving into an "explosive phase" with gold moving above $1900. "'I think we're in the third and final phase of the gold market that's started in 2001, and this will be the most explosive phase for gold…' Giustra said that gold would reach 1,900 in the next months and a lot higher, but it depends on a lot of things. "It will be reckless not to have gold in your portfolio." https://finance.yahoo.com/news...
- Gold is destined to rise to $1600 according to UBS. Wayne Gordon, executive director for commodities and foreign exchange at UBS Wealth Management, affirmed that forecast stating UBS expect real interest rates in the U.S. will enter negative territory which is positive for gold. https://www.bloomberg.com/news/videos/2019-09-03/gold-may-rise-to-1-600-ubs-wm-s-gordon-says-video
- Yet another international bank also sees gold rising to $1600 per ounce. "Gold will surge above US$1,600 an ounce as the Federal Reserve embarks on a quartet of interest rate cuts to combat slowing U.S. growth and the fallout from the trade war with China, according to BNP Paribas SA, which flagged prospects for a significant rise in prices in the coming months." https://www.bnnbloomberg.ca/gold-to-top-1-600-as-fed-cuts-rates-four-more-times-bnp-says-1.1310692
- Bloomberg Professional Services told investors that gold is expected to outperform stock prices. "Bullish precious-metals drivers, including Federal Reserve easing, negative real yields and plunging bond yields, emanate from recovering stock-market volatility. The final pillar for gold and silver is a peak dollar. Gold is set for a period of outperformance vs. the stock market, if the last Fed easing cycle is a guide." https://www.bloomberg.com/professional/blog/unprecedented-foundation-advancing-gold-silver-prices/
- Investors continue to invest in gold including gold-backed ETFs. The World Gold Council reported that investments in global gold-backed ETFs and similar products in August were just 2% away from all-time highs. https://www.gold.org/goldhub/data/global-gold-backed-etf-holdings-and-flows
- The World Platinum Council issued its quarterly report noting rising platinum prices due to increased investment and automotive demand. "Continued strong institutional investment demand in 2019 may reflect recognition by seasoned and new platinum investors of platinum's undervaluation and resurgent demand growth potential… In 2019 we expect platinum to benefit further from the growing pool of investors considering precious metals. The growth in global debt attracting negative interest rates has added to the long-standing attraction of precious metals to diversify equity investments." https://www.platinuminvestment.com/files/438549/WPIC_Platinum_Quarterly_Q2_2019.pdf?utm_source=Sign-Up.to&utm_medium=email&utm_campaign=33580-387445-20th+PQ+Subscriber
ECONOMIC NEWS – RECESSION WORRIES CONTINUE TO PLAGUE MARKETS
U.S. consumers are more fearful about the economy as the U.S.-China trade war continues unabated and recession signals flash brighter.
- CNBC identified eight "major" indicators that a warning about a pending recession. They include the bond market which "historically a trusty signal of an eventual recession," a slowing economy, reduced corporate profits and gold prices: "Gold prices have soared more than 20% since May when the U.S. and China escalated their tariff fight. Similar to government bonds, gold is known as a safe haven trade in times of economic uncertainty." https://www.cnbc.com/2019/09/02/heres-a-list-of-recession-signals-that-are-flashing-red.html
- Ray Dalio, the founder of the world's largest hedge fund, calculates a 25% chance of a U.S. recession in the next two years. More significantly, central banks may be powerless to address the economic crisis. "'The Federal Reserve, European Central Bank and Bank of Japan "have to face the fact that when the next downturn comes there will not be the power to reverse it in the same way that existed before….'" https://www.bloomberg.com/news/articles/2019-09-05/ray-dalio-sees-25-chance-of-recession-this-year-and-in-2020
- Former Fed Reserve Chairman Alan Greenspan, believes that the U.S. will soon join other nations who have implemented negative interest rates. "' "You're seeing it pretty much throughout the world. It's only a matter of time before it's more in the United States…' He added that gold prices have been surging recently because people are looking for 'hard' assets they know are going to have value down the road as the population ages." https://www.cnbc.com/2019/09/0...
- A recession may lead to the adoption of a digital currency by the Federal Reserve. "[A] movement has been brewing among economists, financial-services professionals and central bankers to encourage a rethinking of the technology of currency — those paper notes we carry in our wallets — with an eye toward issuing a digital currency...'The debate isn't about whether we need [a digital currency],' Michael Bordo, an economist at Rutgers University and a fellow at the Hoover Institution, a public policy think tank at Stanford University, told MarketWatch. 'It's about how you do it.'" https://www.marketwatch.com/story/why-the-coming-recession-could-force-the-federal-reserve-to-swap-greenbacks-for-digital-dollars-2019-09-06?mod=mw_latestnews
- The disappointing jobs numbers are actually must worse than reported. This is because job numbers were bolstered by the hiring of temporary employees working on the 2020 census. "The federal government hired 25,000 temporary workers in preparation for the 2020 Census in August, giving the overall jobs gain a big bump." https://www.cnbc.com/2019/09/06/the-jobs-report-would-have-been-much-worse-without-census-workers.html