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"President Trump nominated Jerome Powell as the next Fed chair.
Mr. Powell's thinking on monetary policy is similar to
that of Janet
Yellen and therefore a continuation of the present low
interest rate
environment should be expected to continue. However, he
is
expected to more lenient toward financial market
regulations, which is
a departure from Yellen's stance on the matter and more
in line with
Mr. Trump's thinking. If done correctly, a combination
of gradually
rising interest rates coupled with deregulation could
continue to
Support present growth in the U.S. economy. However, a
misstep
Could hurt the United States' growth trajectory. Any
such misstep is
more likely to occur on the deregulation front, with
excessive
De-regulation raising risks in the financial markets.
Increased
vulnerabilities in the financial markets coupled with
heightened
political risk should work well for gold, with investors
adding some
gold to their portfolio as a hedge."
... Myra P. Saefong Gold Ends at
More Than 3-Week High As
U.S. Equities, Dollar Decline
"Gold on Thursday marked its highest settlement in
more than three
weeks. 'Gold prices have rebounded, likely reflecting
some safe-
haven flows on U.S. stock market weakness and Middle
East risks,'
said Rob Haworth, senior investment strategist for U.S.
Bank Wealth
Management. 'In our view, the longer term trend is
likely to be lower
due to [Federal Reserve] rate increases and balance
sheet tapering,
which should provide a modest lift to real interest
rates--a headwind
for gold prices.' December gold GCZ7, -0.08% rose $3.80,
or 0.3%, to
settle at $1,287.50 an ounce. That was the highest
finish since Oct.
16, according to FactSet data."
... Oil Prices Jump After Saudi Citizens Being Urged To Leave Lebanon
"Oil prices touched fresh session highs on Thursday following a
report from Al Arabiya that Saudi Arabia has urged its
nationals to
leave Lebanon immediately. 'There is a rumor Saudi
Arabia is pulling
their citizen out of Lebanon. So there is speculation
they are going to
mount an attack,' said Phil Flynn, senior market analyst
at Price
Futures Group."
...And From Myra P. Saefong in Barron's Despite Rate Hike,
Gold Seems Headed Up
"Gold looks likely to build on its price gains for 2017 through the
end
of the year. And even an interest-rate increase by the
Federal
Reserve in December may not be able to stop it.
So far this year, gold futures have already surpassed the roughly
8.6% gain they scored for all of 2016. After settling at
$1,269.20 an
ounce on Friday, they trade more than 10% higher for the
year to
date.
Gold has found support from the overall weakness in the U.S. dollar,
with a key gauge of the greenback, the ICE U.S. dollar
Index, down
over 7% for the year so far. Gold has been 'trading like
a currency'
and that will probably continue at least through year
end, 'with its
pathway most likely defined by strength or weakness in
the dollar,'
says Matt Osborne, chief investment strategist at
alternative
investment strategy provider Altegris.
Gold has managed to climb despite three Fed rate hikes in the past
year, and another three expected in 2018. 'Gold bugs
don't need to
fear the Fed,' says Brien Lundin, editor of the Gold
Newsletter. 'In
fact, they should count on the Fed to launch gold's next
big rally. After
the Fed's previous two year-end rate hikes, gold took
off on big,
multi month rallies.' The central bank raised rates in
December 2015
for the first time since 2006, hiked once more in
December 2016, and
twice more this year."
... Oil Prices Jump After Saudi Citizens Being Urged To Leave Lebanon
"The Federal Reserve and the European Central Bank are going to
continue to have an influence on gold.
And it's not a coincidence that the Central Bank of Russia has
already more than doubled the pace of its gold purchases
according
to the World Gold Council. The world is uneasy.
Meanwhile, China is
securing its strength in the world by crowning Xi and
elevating him to
Mao status.
Many have said there's difficulty finding new gold supplies to keep up
with the increasing demand. Global gold supply increases
only about
1.6% per year, and the floating supply of gold has been
disappearing
into private vaults.
Refiners cannot find enough scrap gold to produce find gold to meet
demand. If this continues, the next solution would be
much higher
prices.
Interestingly, Goldman Sachs is indirectly bullish on the precious
metals by saying these metals remain a 'relevant asset
class' sought
as a safe haven in response to 'fear' in developed
economies. The
growing wealthy
class in the emerging countries are buying gold too.
In their report "Fear and Wealth" they assess
the factors that tend to
Influence demand in both developed and emerging
economies. They
claim that the combo of fear and wealth accounted for
over 400% rise
in gold prices over the two decades since the late
nineties.
Silver is starting to firm up! This is good news for all because silver
tends to be a sleeper. And when it wakes up, it tends to
soar. We
may be getting
closer to seeing this type of action.
Once silver breaks above this year's high near $18.50, it'll be off and
Running, and
it'll likely outperform gold."
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