Recent comments by [the following] analysts reflect the current uncertainty of the gold and silver markets.
The original article has been edited here for length (…) and clarity ([ ]) by munKNEE.com – A Site For Sore Eyes & Inquisitive Minds – to provide a fast & easy read.
…Brien Lundin believes 2018 is shaping up to be a good year for metals, but he admits that making short-term gold price predictions is difficult right now saying:
- the markets are still getting acquainted with Jerome Powell as the new head of the Fed and sorting out what to expect under his regime…[and] Powell is expected to be “more frank” than his predecessor, Janet Yellen.
- President Trump’s tariff plans are a “terrible, terrible idea” with respect to their impact on gold. “I think it creates uncertainty, which creates volatility in the market. There is a scenario in which gold could benefit from that but I don’t look at it as a long-term driver of gold prices.”
TD Securities takes a more positive view of the proposed tariff plan’s effect on gold [stating that]:
- a global trade war might be triggered by the tariffs which could make gold a “winner” in “relative” terms compared to other commodities.
- “These policies look to be negative for aluminum, steel, base metals, crude oil, and PGMs due to the negative impact on demand. Gold would likely be the winner in relative, if not in absolute terms.”
Goldman Sachs is a long a critic of gold but a recent convert to gold supporter [conveying that]:
- …a trade war could actually help gold. A potential outcome of such a trade conflict is that other nations would start dumping U.S. Treasuries, which could boost gold demand…
- another impact beneficial to gold could be capital flows, particularly from U.S. trade partners that are net savers.
Adrian Day notes that gold rose 13% last year and sees more gains ahead for the yellow metal [saying]:
- …“the main events for gold are interest rates, inflation and concern about other markets…[and] all of these add up to a positive year for gold.”
- …“I think bitcoin has had much more of an effect on gold stocks, particularly junior gold stocks, because it is the same kind of investor who is buying junior gold stocks, bitcoin, marijuana — so it has been competition for that…For gold itself, I think it is very marginal. It’s definitely competition and it’s definitely a negative for gold, but to me it’s very, very slight.”
TD Securities…was touting silver as “the precious metal to buy in 2018” back in November advising that:
- investors should go long silver with a price target of $20 an ounce, a 17% gain from its price at the time. As of the end of this week, silver was at $16.73.
- “With equities in record territory and pricing in both low rates and earnings perfection, there will be a growing constituency who believe that there is more downside than upside risk. This historically has meant that investors beef up gold and precious metals exposure as a hedge…Underperforming silver is set to shine as gold improves amid still low real rates, firm demand, weak supply and higher [volatility].”
- This week, the bank reiterated its confidence in the upside potential for silver in light of some recent price weakness.
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