Best of the Week
Most Popular
1. Investing in a Bubble Mania Stock Market Trending Towards Financial Crisis 2.0 CRASH! - 9th Sep 21
2.Tech Stocks Bubble Valuations 2000 vs 2021 - 25th Sep 21
3.Stock Market FOMO Going into Crash Season - 8th Oct 21
4.Stock Market FOMO Hits September Brick Wall - Evergrande China's Lehman's Moment - 22nd Sep 21
5.Crypto Bubble BURSTS! BTC, ETH, XRP CRASH! NiceHash Seizes Funds on Account Halting ALL Withdrawals! - 19th May 21
6.How to Protect Your Self From a Stock Market CRASH / Bear Market? - 14th Oct 21
7.AI Stocks Portfolio Buying and Selling Levels Going Into Market Correction - 11th Oct 21
8.Why Silver Price Could Crash by 20%! - 5th Oct 21
9.Powell: Inflation Might Not Be Transitory, After All - 3rd Oct 21
10.Global Stock Markets Topped 60 Days Before the US Stocks Peaked - 23rd Sep 21
Last 7 days
Investing in the METAVERSE Stocks Universe - 8th Dec 21
Stock Market Sentiment Speaks: I Expect 15-20% Returns For 2022 - 8th Dec 21
US Dollar Still Has the Green Light - 8th Dec 21
Stock Market Topping Process Roadmap - 8th Dec 21
The Lithium Breakthrough That Could Transform The Mining Industry - 8th Dec 21
VR and Gaming Becomes the Metaverse - 7th Dec 21
How to Read Your Smart Meter - Economy 7, Day and Night Rate Readings SMETS2 EDF - 7th Dec 21
For Profit or for Loss: 4 Tips for Selling ASX Shares - 7th Dec 21
INTEL Bargain Teck Stocks Trading at 15.5% Discount Sale - 7th Dec 21
US Bonds Yield Curve is not currently an inflationist’s friend - 7th Dec 21
Omicron COVID Variant-Possible Strong Stock Market INDU & TRAN Rally - 7th Dec 21
The New Tech That Could Take Tesla To $2 Trillion - 7th Dec 21
S&P 500 – Is a 5% Correction Enough? - 6th Dec 21
Global Stock Markets It’s Do-Or-Die Time - 6th Dec 21
Hawks Triumph, Doves Lose, Gold Bulls Cry! - 6th Dec 21
How Stock Investors Can Cash in on President Biden’s new Climate Plan - 6th Dec 21
The Lithium Tech That Could Send The EV Boom Into Overdrive - 6th Dec 21
How Stagflation Effects Stocks - 5th Dec 21
Bitcoin FLASH CRASH! Cryptos Blood Bath as Exchanges Run Stops, An Early Christmas Present for Some? - 5th Dec 21
TESCO Pre Omicron Panic Christmas Decorations Festive Shop 2021 - 5th Dec 21
Dow Stock Market Trend Forecast Into Mid 2022 - 4th Dec 21
INVESTING LESSON - Give your Portfolio Some Breathing Space - 4th Dec 21
Don’t Get Yourself Into a Bull Trap With Gold - 4th Dec 21
GOLD HAS LOTS OF POTENTIAL DOWNSIDE - 4th Dec 21
4 Tips To Help You Take Better Care Of Your Personal Finances- 4th Dec 21
What Is A Golden Cross Pattern In Trading? - 4th Dec 21
Bitcoin Price TRIGGER for Accumulating Into Alt Coins for 2022 Price Explosion - Part 2 - 3rd Dec 21
Stock Market Major Turning Point Taking Place - 3rd Dec 21
The Masters of the Universe and Gold - 3rd Dec 21
This simple Stock Market mindset shift could help you make millions - 3rd Dec 21
Will the Glasgow Summit (COP26) Affect Energy Prices? - 3rd Dec 21
Peloton 35% CRASH a Lesson of What Happens When One Over Pays for a Loss Making Growth Stock - 1st Dec 21
Stock Market Sentiment Speaks: I Fear For Retirees For The Next 20 Years - 1st Dec 21 t
Will the Anointed Finanical Experts Get It Wrong Again? - 1st Dec 21
Main Differences Between the UK and Canadian Gaming Markets - 1st Dec 21

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Gold and Silver Boosted by first Fedrate cut since Financial Crisis

Commodities / Gold & Silver 2019 Aug 07, 2019 - 10:41 AM GMT

By: John_Lee

Commodities

The Federal Reserve cut interest rates on Wednesday (July 31, 2019) for the first time in more than a decade.It was trying to keep America’s record-long economic expansion going by insulating the economy from mounting global threats.



Source: US Federal Reserve
August 1, 2019, just a day after Fed rate cut.US President Donald Trump said the US would place a 10 per cent tariff on $300bn in additional Chinese goods. This escalation of the trade war between Washington and Beijing is a new threat to the global economic outlook.The announcement unsettledfinancial markets continued on Friday and lead to a haven buying of bonds and a broad equity sell-off.


Gold chart shows 6-year breakout above $1,380.Head and shoulder patternindicatesimminent reachingof $1,660

China is buying more gold as the trade war drags on; Russia joins the party.

The rise China’s gold holdingreflects the Chinesegovernment’s “determined diversification” away from dollar assets, according to Argonaut Securities (Asia) Ltd analyst Helen Lau. She added that retail demand has also picked up. At this rate of accumulation, China could buy 150 tons in 2019, she says.

“It’s a diversification away from the U.S. dollar, particularly given the trade tensions and the potential technology cold war that’s evolving,” says Bart Melek, global head of commodity strategy at TD Securities. “We have to remember that gold is nobody’s liability.”

Russia’s total gold reserves top $100 billion as central bank adds another 600K ounces in June

Russia bought 200,000 ounces in May, 550,000 in April, 600,000in March, one million in February, and 200,000 in January.
During the last decade, Russia’s gold reserves have gone from 2% to 19% (as of the end of 2018 Q4), according to the World Gold Council.
With central banks rushing tobuy gold,other institutions and retailers will surely follow.

 With real estate crumbling, investors rush to gold and silver

  • Manhattan real estate had its worst first quarter since the financial crisis, according to a report from Douglas Elliman and Miller Samuel.
  • Sales fell 3 percent in the first quarter, which marked sixth straight quarters of decline.
  • That is the longest decline in the 30 years that the real estate appraisal firm has been keeping data.

With the housing market toppling, it’s no surprise investors are turning to gold and silver, the hard assets whose value has stood the test of time.

Ray Dalio says gold will be a top investment during the upcoming “paradigm shift” for global markets

Hedge fund multi-billionaire kingpin Ray Dalio is seeing a case for gold as central banks (1) get more aggressive with policies that devalue currencies and (2) are about to cause a “paradigm shift” in investing.
Dalio, the founder of the world’s largest hedge fund, wrote in a LinkedIn post that investors have been pushed into stocks and other assets that have equity-like returns. As a result, too many people are holding these types of securities and are likely to face diminishing returns.
“I think these are unlikely to be good real returning investments and that those that will most likely do best will be those that do well when the value of money is being depreciated and domestic and international conflicts are significant, such as gold,” the Bridgewater Associates leader said.

Silver isset to outperform gold based on gold/silver ratio, silver mining companies present excellent entry points.

At 90, the gold/silver ratio is the highest it’s been in 25 years.The average level since 1990 has been 67.
7.23 iotw chart2
Source: Kitco.com
Silver outperforms after an extremely high gold/silver ratio reading. It averagesa gain of close to 10% over the next year, when the gold/silver ratio is at the current level.

Source: Kitco.com
Silver could hit $28 in the near term, catching up to gold.
With US presidential election coming in 2020 and the Fed’s having little stomach for a market correction, analysts agree that the path of least resistance for interest rates is down.
Rising silver price is bullish for silver mining companies such as Prophecy Development CorpProphecy(TSX:PCY , OTCQX: PRPCF)
Prophecy’s Pulacayo-Paca project has30 million indicated silver ounces, 21 millioninferred silver ounces; only 30% of the known mineralization drilled. With 95 million Prophecy shares outstanding, investors are getting half an ounce of silver in the ground for every share of Prophecy.
Prophecy’s Pulacayo-Paca silver grades are at 256g/t open pit and 455g/t underground, rankingPulacayo near some of highest-grade silver deposits in the world (silver resource and grade from www.prophecydev.com).
With past drill intercepts such as1,031 g/t Ag over 25 meters (PUD 109), and 1,248 g/t Ag over 10 meters (PUD 118), Prophecy is preparing to drill Pulacayo-Pacain the fall; investors might justrediscover this silver giant sleeper in the midst of bullish silver run.

John Lee, CFA
jlee@prophecydev.com
August 5, 2019

John Lee, CFA is an accredited investor with over 2 decades of investing experience in metals and mining equities. Mr. Lee is the Chairman of Prophecy Development Corp (www.prophecydev.com). John Lee is a Rice University graduate with degrees in economics and engineering.

Disclaimer:  The views expressed herein are those of the author and may not reflect those of Prophecy Platinum Corp. or Prophecy Coal Corp.  The information herein is provided for information purposes only, and is in no way to be construed as advice or solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments.  No warranty expressed or implied exists between the author of this article and the reader as to the accuracy of the information herein provided.  The information contained herein is based on sources, which the author believes to be reliable, but is not guaranteed to be accurate, and does not purport to be a complete statement or summary of the available information.  Readers are encouraged to conduct their own research and due diligence, and/or obtain professional advice.  Any opinions expressed are subject to change without notice.  Prophecy Platinum Corp., Prophecy Coal Corp. and the author of this article do not accept culpability for losses and/or damages arising from the use of this article.

John Lee Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in