LABOR DAY SPECIAL – ONE DAY ONLY!
LABOR DAY SPECIAL – ONE DAY ONLY!Release Date: Saturday, August 31, 2019
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METALS MARKET UPDATE – WHAT YOU NEED TO KNOW
- Gold prices end the month with higher prices.
- Gold has now seen four consecutive months of gains.
- U.S.-China trade war, fears of global economic slowdown continue to drive gold prices as investors seek protection with a safe haven asset.
- Silver enjoyed it biggest monthly percentage rise since June 2016.
("Gold eases, but still heading for fourth monthly gain," CNBC, 8/30/19.)
METALS NEWS – BANKS BULLISH ON GOLD; SILVER JOINS GOLD'S BULL MARKET
Financial institutions throughout the world see a bright future for gold. Meanwhile, silver prices have risen to two-year highs as investors acquire both gold and silver on safe haven buying.
- Joe Foster, the gold portfolio manager for VanEck, told Yahoo Finance! that gold prices will likely rise above $1600. "'Investors are very worried about the economy and the future of the financial system and they are going to gold as a hedge … "It's very possible [we blow by $1,600 an ounce]. Gold is establishing a new trend — I think it's the beginning of a new bull market in gold….'" https://au.sports.yahoo.com/recession-fears-have-investors-going-to-gold-as-a-hedge-prices-are-skyrocketing-162108787.html
- Two major international banks are telling investors that the gold bull market will continue. Swiss banker UBS Group AG has forecast gold prices to rise to $1,650 per ounce over the next 12 months. Citigroup, Inc. also sees higher prices based upon a key ratio between gold and the S&P. "It is only a matter of time before a significant bullish break occurs that could trigger a rally to the tune of 25% in favor of gold." https://www.newsmax.com/finance/markets/citi-gold-price/2019/08/29/id/930538/
- Jim Bianco, President of Bianco Research, sees the global economy falling into recession with the only bright spot being higher gold prices. "Today, gold is the high yielding alternative in a world with negative interest rates. As long as we don't see a bottom in the global economy, no immediate resolution to trade, and the Fed doesn't get aggressive, I could see the gold price hitting $1700 or $1800 in the fourth quarter and maybe even making a run at the all-time high of $1900 before the end of the year." https://www.zerohedge.com/news/2019-08-29/bianco-warns-negative-rates-are-extremely-toxic-sees-gold-record-highs-year-end
- MarketWatch reported that gold was on track for its fourth month of consecutive gains while silver prices outpaced even gold's impressive rise on a percentage basis. ""Silver is always known as a laggard to gold, and now you are seeing people getting into silver, and believing it's a bull market…' With a growing universe of negative interest rates, central banks debasing paper currencies, central banks accumulating gold, slowing global growth and trade war uncertainty, "gold has become [a] logical safe harbor for institutional investors," said Michael Armbruster, managing partner at Altavest." https://www.marketwatch.com/story/silver-rally-is-stealing-the-show-even-as-gold-surges-to-6-year-high-2019-08-29?mod=commodities
- Australia and New Zealand Banking Group (ANZ) believes the central bank gold buying spree will continue for the coming years fueling higher prices. "Increased central banks' gold purchases have been one of the key factors supporting higher gold prices … Gold is a strategic asset, from a risk-adjusted returns perspective, so amid heightened economic and geopolitical risk, we see it benefitting from its safe-haven status. The macro backdrop is turning in its favor with easing monetary conditions and heightened risks…'" https://www.kitco.com/news/2019-08-29/Central-banks-love-affair-with-gold-continues-as-currency-wars-threaten-outlook-ANZ.html
- Jeffrey Christian of the CPM Group, an investment banker and asset manager, stated that his company has revised its earlier forecasts and now expect gold and silver prices to rise sharply. "We're actually more bullish sooner now than we were earlier in the year… And at that point, like as in 2008, 2009 you would see the gold price and the silver prices rise sharply... So, it just makes sense to have some of your wealth and some of your investment portfolio in gold and silver." https://www.fxstreet.com/analysis/jeff-christian-exclusive-were-now-forecasting-sharply-higher-gold-silver-prices-sooner-201908232030
- A Fox Business report explained that gold is an important hedge against currency manipulation. "Gold has soared in recent weeks, and it showing no signs of letting up anytime soon… 'I think gold is a very good hedge against currency manipulation,' Jeff Sica, Founder, President and Chief Investment Officer of Circle Squared Alternative Investments said.. 'The more the governments mess up, the more gold becomes attractive to me. I do not trust governments and the way they handle currency.'" https://www.foxbusiness.com/markets/gold-price-soaring-currency-manipulation-hedge
ECONOMIC NEWS – CONSUMER SENTIMENT SEES LARGEST DECLINE IN NINE YEARS; FEARS OF GLOBAL RECESSION GROW
U.S. consumers are more fearful about the economy as the U.S.-China trade war continues unabated and recession signals flash brighter.
- The University of Michigan's consumer sentiment index for August is 89.8, a significant drop from 98.4 in July. The change marks the largest monthly decline since December 2012. https://www.cnbc.com/2019/08/30/us-consumer-sentiment-august-2019-final.html
- The Economist reported that portions of the United States may already be in recession. "Since last November General Motors has cut several thousand factory jobs at plants across the Midwest. In early August US Steel said it would lay off 200 workers in Michigan. Sales of camper vans dropped by 23% in the 12 months ending in July, threatening the livelihoods of thousands of workers in Indiana, where many are made. Factory workers are not the only ones on edge. Lowes, a retailer, recently said it would slash thousands of jobs. Halliburton, an oil-services firm, is cutting too." https://www.economist.com/united-states/2019/08/29/parts-of-america-may-already-be-facing-recession
- A new sign of an impending recession is that the wealthy have reduced their spending. "[R]ecent data suggest that the U.S. wealthy are beginning to shut their wallets. If their spending falls further, the broader economy could start to feel the pain… 'If high-income consumers pull back any further on their spending, it will be a significant threat to the economic expansion….'" https://www.cnbc.com/2019/08/28/the-rich-arent-spending-signaling-a-possible-recession-ahead.html
- Europe has a 70% chance of falling into recession warns economist and bond expert, Mohamed El-Erian. "Europe is 'quickly losing momentum' and the EU is 'teetering on the edge of a significant slump.'" https://markets.businessinsider.com/news/stocks/mohamed-el-erian-europe-has-70-chance-falling-into-recession-2019-8-1028458673
- India's economic growth has slowed to 5%. "The data mean Asia's third biggest economy is now growing at its slowest pace in over six years." https://www.cnn.com/2019/08/30/economy/india-gdp-economy/index.html
- China's economic growth has slowed to its lowest rate in more than a quarter century. "The trade war and China's economic slowdown has already hit some of the world's biggest businesses… Global auto brands are also suffering as the world's largest car market slows further this year, following its first contraction in decades in 2018." https://www.cnn.com/2019/07/15/economy/china-gdp-growth/index.html
- Mortgage applications had their largest weekly drop in over four months while interest rates creeped higher. "Mortgage rates rose last week prompted by volatility in the Treasuries markets as investors fretted over the trade conflict between China and the United States and its impact on an already softening global economy. This uncertain outlook will likely curb interest in home buying and potential borrowers from seeking a mortgage." https://in.reuters.com/article/us-usa-mortgages/u-s-mortgage-activity-posts-biggest-fall-in-four-months-mba-idINKCN1VI1GS?il=0
- The popular teen clothing store Forever 21 is reportedly preparing to file for bankruptcy. The company has over 800 stores throughout the world. https://www.cnn.com/2019/08/29/business/forever-21-bankruptcy-trnd/index.html