Jim Rickards Predicts Gold Could Hit $10,000 an Ounce

Famed author believes the Fed could push the metal into a major rally

gold to hit $10,000

Gold’s price fluctuations have long been tied to the Federal Reserve’s actions – the perceived tone of Fed officials in public statements and meetings and expectations of rate hikes both tend to impact the price of gold, sometimes regardless of the Fed’s decision.

Expectations are high for a rate hike this month, and many even see a 100% chance of the Fed following through. Yet famed author and investor Jim Rickards is among those doubting the Fed’s ability to go through with the forecasted hike.

Talking to Kitco, Rickards pointed out the oft-overlooked factor of inflation goals. To Rickards, the Fed’s duty lies in job creation and price stability. With the former all but taken care of, the real issue becomes whether the central bank can meet its inflation targets year-on-year.

The article notes that, finding energy and food prices too volatile, the Fed tends to focus on Personal Consumption Expenditures, or PCE, in order to gauge whether inflation standards are being met. As Rickards points out, the PCE index continues to present a problem for the Fed due to its nine month-long decline, falling from 1.9% to 1.3% in that span.

Rickards says the threat of disinflation immobilizes the Federal Reserve and makes a December rate hike unlikely despite market expectations. Should the declining PCE stay at 1.3% or fall lower, there is no chance of a rate hike happening this month.

The article then recognizes Rickards’ opinion goes in line with the summary from the Fed’s latest policy meeting. In it, Fed officials noted that inflation might remain below the targeted 2% longer than expected, with some acknowledging that policy firming should be halted until inflation returns to the desired path. Some participants of the meeting also expressed concerns that following through with the planned rate hike before the end of the year could further subdue inflation expectations.

This discourse already helped gold come close to recapturing the $1,300 level, stopping just short at $1.295 an ounce. Rickards, however, believes that the motion around the $1,300 level is less important compared to what’s coming.

The author expects the Fed’s renegation of the December rate hike to have a massive impact on the markets, which will take a 180-degree turn. As a result, the dollar and bonds will fall while gold will rally further.

His long-term prediction is that gold will go as high as $10,000 an ounce.

While this level might sound exorbitant, Rickards stresses that the forecast is realistic as having such a price of gold is the only way to avoid deflation.

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Why TD Securities Expects Gold Prices to Head Higher in 2018

 

Several analysts expect 2018 to be a bullish year for gold

gold headed higher in 2018

In spite of the possibility of successive rate hikes by the Fed, several analysts express in a recent TheStreet article that they expect 2018 to be a bullish year for gold. Among the primary reasons listed are the Fed’s potential reluctance to follow through with the planned rate hikes, geopolitical triggers, improved physical demand in key buying nations and investment demand as a hedge against stocks.

In the article, Bart Melek, head of commodity strategy at TD Securities Inc. (TDS), says he believes gold will benefit from a dovish Federal Reserve policy that will see a maximum of three rate hikes by the end of next year with real rates staying low. Aside from making gold a more attractive investment, lower rates also undercut the dollar, giving gold yet another boost. While there is a chance for multiple hikes next year, Melek sees a strong possibility for only a single hike by the end of 2018.

Expecting President Trump’s nominee for the next Fed leader to carry out a similarly dovish policy, Melek also listed the likelihood of a major correction in stocks and higher demand in India and China as further tailwinds for gold.

“I think 2018 is going to be a good year for gold, and it should shine bright in the New Year,” said Phil Flynn, senior analyst with Price Futures Group. More than merely acting as a hedge, Flynn explained in the article that the flimsy-footed run stocks have rendered gold “undervalued”, which could lead to purchases of the metal. Besides a potential price inflation coming from an improvement in overall commodities, Flynn also listed the launch of bitcoin futures as a boom for gold, stating that it will highlight the yellow metal’s role as an alternative currency.

Societe Generale’s metals analyst Robin Bhar thinks that gold could benefit if the planned U.S. tax cuts do not materialize, as this would make the Fed even more dovish. In the article, Bhar says conflict in the Middle East and terrorist threats around the world may continue to provide support, as will the likelihood that central banks remain net buyers of gold.

In terms of forecasts, the article shows that TDS sees gold reaching an average of $1,313 an ounce next year, with an average of $1,325 in the fourth quarter of 2018, compared to their expectation of $1,257 for 2017. Meanwhile, Flynn says gold will average $1,400 an ounce next year, with the potential to reach $1,500. Macquarie, a financial institution, agrees, stating in a recent report that gold will hit $1,400 for the first time in five years driven largely by a weakening dollar and political issues in the U.S.

Gold Twin Maples Distributed Exclusively with Birch Gold Group

A successor that captures everything the Gold Maple Leaf has to offer with a modern touch.

gold twin maples canadian from birch gold group

First minted in 1979, the Canadian Gold Maple Leaf’s first issue covered a span of only three years. However, due to its immense popularity, the Canadian Parliament decided to continue its production through the Royal Canadian Mint (RCM), and the coin became a widespread token of value available in a variety of different sizes.

Given its reception, a successor that captures everything the Gold Maple Leaf has to offer while adding a modern touch was expected. Today, Birch Gold Group proudly announces that it has secured the rights to exclusive distribution of the next great coin from the RCM, the Gold Twin Maples.

Those familiar with the Canadian Gold Maple Leaf will find that the Gold Twin Maples coin has many of the traits that gave widespread recognition to the previous iteration. The physical perks of the coin provide an unprecedented amount of accessibility: weighing 1/4 ounces (7.7 grams) with a diameter of 20 mm (0.78 inches) and a face value of CAD $10, the coin can be held by investors big and small and makes a special addition to any collection. Its high gold purity of 99.99% will further ensure that the coin remains a sought-after commodity for years to come, and its compatibility with precious metals IRAs will provide immense versatility to anyone who acquires it.

As with several other coins produced by the Royal Canadian Mint, artist Celia Godkin was brought on to ensure a design that ages every bit as well as the coin’s value. Each of the Gold Twin Maples’ sides feature imagery that signals the highest status among precious metals coins: a portrait of Her Royal Highness Queen Elizabeth II on the obverse and a tribute to Canada’s unique sugar maple tree on the reverse. The addition of a micro-engraved twin maple leaf and precise radial lines during mintage give the coin unbeatable protection against counterfeiting while preserving its intricate design.

With how well the Gold Maple Leaf coin has been received by investors for several decades, and given the Gold Twin Maples’ flawless combination of assured value and unique design, Birch Gold Group has no doubt that the newest creation from the Royal Canadian Mint will prove to be everything that the predecessor was, and more.

Peter Reagan, financial market strategist with Birch Gold Group, is excited for the coin’s prospects. “It’s an honor for the Royal Canadian Mint to select us as the exclusive dealer for this beautiful coin. We believe that it will be extraordinarily popular among our customers and are excited to offer it to them.”

For more info on this striking coin, visit Birch Gold’s website at www.birchgold.com or call (800) 355-2116.

3 Issues that Influence Gold Bullion Coin Prices

3 Issues that Influence Gold Bullion Coin Prices

If you’re purchasing gold coins as a safe-haven investment, clearly, you want the best possible rate for those gold bullion coins. But how is that rate determined? Here are three factors that will affect the price you’ll ultimately pay.

 There are numerous reasons why gold bullion is an excellent addition to your portfolio; not only is it a liquid asset, it is also a solid hedge against inflation. However, when purchasing gold bullion coins, you might notice that the price of different coins varies, even though for many coins, the amount of gold content is often the same. Here’s why.

Investors like certain coins. Yes, even though gold bullion buyers don’t view the coins as necessarily being collectible in the sense that rare, numismatic coins are, some bullion coins are just more popular than others, which does affect the price. For example, American Buffalo and American Eagle coins are priced slightly higher than Canadian Maple leaf coins.

Dealer mark up. Precious metals dealers add a premium to the price of bullion in order to function as a business and cover the cost of acquisition, customer service, storage, insurance, rent, and other factors.

Coin weight. Coins that are lighter than one troy ounce will be costlier in the long run than single ounce coins, since the premiums will be higher.

If you are interested in adding gold or other precious metals to your portfolio, contact the professionals at Birch Gold Group today for a thorough consultation. Visit blog link for more information.

Fear of Things that Glitter: Don’t be Scared of Gold | BirchGold.com

Fear of Things that Glitter: Don’t Be Scared of the Bright Yellow Metal

Why don’t more Americans have gold in their portfolios? Could gold bears have made them skittish?

In spite of the fact that gold is a safe-haven asset that is roundly described as being a “crisis commodity,” gold isn’t a widely-purchased asset. However, in times like these, where economic and political stability is in flux, gold might be the one addition to your portfolio that could deliver financial security.

The lack of responsibility on the part of global banks has created tremendous economic turmoil all over the world. Moreover, Europe is in absolute crisis due to the proliferation of terrorist activity that shows no sign of abating, the burden of a flood of refugees, and Great Britain’s ongoing threat to leave the European Union. Every day, we may be coming closer and closer to economic collapse, and our individual defenses are relatively few.

Except for gold.

Historically, the price of gold spikes when markets crash. When intangible stock values evaporate, people turn to the physical comfort of gold. Every global culture recognizes the value of gold and will continue to recognize the value of gold in spite of the fluctuation of other assets, such as oil, natural gas, and corn. Central banks amass gold as a protection against fiscal downturns. Gold has the benefit of being both a hedge and a safe haven.

So, in spite of all analytical and historical evidence to the contrary, why do bears insist upon ignoring all of gold’s merits?

Because people don’t know how to buy it.

Even though gold is more likely to retain value more consistently than even bread, buying gold isn’t automatically fool-proof. You have to have the right objective, consultation, and action-plan before buying gold can be considered a truly safe strategy.

Before you make the decision to buy gold, contact us today for a comprehensive consultation.

Here’s Why You Should View Gold as Being “On Sale” Right Now

With the price of gold down in the past few years, one market watcher argues that current conditions present a perfect opportunity to buy some of the metal. Find out why here.

While many are rushing for the exit as the price of gold declines, some folk are making a different play: They’re buying. Why’s that? Writing for Forbes, Frank Holmes argues that they know gold is a safe bet in the long run – perhaps the safest – and see gold’s current status as ‘on sale’.

Recent sales of physical gold fully support with this, having already reached multiyear records and still on the rise. In contrast to the gold futures derivatives market, American Gold Eagle sales reached 161,500 ounces in July – the highest since April of 2013. Individual Americans aren’t the only ones still having faith in gold – the Fed maintains its 8,133 ton reserve, European countries are repatriating gold and Texas is in the process of creating its own bullion depository.

So what is beating the price of gold down? Holmes notes that conspiracy theories often abound when gold plummets. Price manipulation might not be such a stretch this time around, given some odd recent events. Last week’s five-ton sale on the Shanghai Gold Exchange (SGE) caused gold to experience a mini ‘flash crash’ for the first time in 18 months. The so-called bear raid was thought to have been caused in China, but later information pointed towards New York as the culprit.

Yet another conspiracy theory focuses on the relatively mild interest in gold as a safe-haven asset during the Greek crisis. This has led some to speculate that European central banks possibly sold gold down, likely making the crisis seem less severe in order to dissuade people from turning to the yellow metal for protection.

Regardless of the veracity of these claims, Holmes says that gold’s long-term status remains untouched thanks to two key demand drivers: What he calls the “Love Trade” and the “Fear Trade”. The Love Trade refers to gold purchases for weddings, anniversaries and cultural events; these intensify in the wake of upcoming holidays, especially ones in Asia, such as Diwali and the Chinese New Year. The Fear Trade stems from available money supply and real interest rates turning negative, a scenario seen beneficial for the metal – current positive real interest rates have been acting as a headwind for gold.

But can gold benefit with a looming interest rates hike? Regarding the hike, Holmes says: “With a struggling global economy and commodity deflation odds favor rates will not rise soon in America, and gold will revert back to the mean.”

For all the latest on physical precious metals and financial news, be sure to check out our blog.

U.S. Economic Anxiety Rises As Big Name Retail Chains Continue to Close Massive Quantities of Stores

All over the U.S., retailers big and small are closing dozens – or even hundreds – of their stores. Why is this happening and, more importantly, what does it mean for the future of the country’s economy?

Michael Snyder, the man behind the Economic Collapse Blog, is not the only one who thinks this is a sign of sinister things to come. Middle class families have long been the main driving force behind the economy, thanks to the ‘spending money’ they could put aside from their incomes. But now, as the middle class is being “systematically destroyed”, as Snyder puts it, consumer spending just isn’t there anymore.

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Photo Credit: ronaldhennessy via Compfight cc

Large and well-known retailers like Abercrombie & Fitch and Barnes & Noble will have closed hundreds of stores by the end of 2015. Sure, part of that could be attributed to the rise of online retailing, but that’s far from the real culprit behind struggling sales: lack of money to spend.

A troubling statistic sheds light on why people suddenly have less – if any – money to spare. An analysis performed by Enterprise Community Partners revealed that one out of four American citizens now spends half of his or her income on rent. With the rest being spent on things like groceries and gas, it’s not hard to see why little is left for discretionary spending.

This situation sounds bad enough, but Snyder believes the worst is yet to come. He quotes Thad Beversdorf’s belief that consumer spending is showing “the initial signs of a severe pull back” to strike an unpleasant point: the current trajectory of our economy is eerily reminiscent of the build-up to the collapse of 2007/2008.

Snyder concludes by wondering: if thousands of stores are being closed already, what will things look like when an economic crisis truly hits the U.S.? “Once it does, the business environment in this country is going to change dramatically, and a few years from now America is going to look far different than it does right now,” he warns.