Commodity Trade Mantra

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The Surprising Force Behind The Rally In Gold Prices - Can It Continue?

After a few years of losses, gold prices have risen 17% year-to-date as of April 25, making it one of the best-performing investments this year. Perhaps more remarkably, gold mining stocks are up nearly 78% during the same period. The question now is: can the rally continue? Let’s take a look at the catalysts for the rally in gold prices.

People Rushing into Gold as Large Denomination Notes May Soon Be Killed

This talk about large-denomination bills is really gaining momentum, and I think that’s at least half responsible for the run up in gold prices over the last couple of months. Think about it—in a world without cash, gold (and silver) becomes the currency of anonymity. This also speaks to the need to hold gold in physical form, not in “paper” form.

The Historic Dow Jones - Silver Ratio Points To $300 Silver

When silver hit a high of $49 in April 2011, the Dow Jones-Silver ratio fell to 250/1 from a high of 2,500/1 in June 2001. I feel that now the ratio will likely fall lower than the 25/1 ratio set in 1980. The propped up stock markets, at some point, will finally resume their crash lower. If we assume that Dow falls to 7,000 points, a 25/1 Dow Jones-Silver ratio would suggest a $300 silver price.

When Gold Confiscation Is a Personal Choice

The day government really wants your gold, it will simply offer a high price to coax it from you, paying with paper money freshly printed that morning. The offer would be high enough to outbid competing market expectations. Many gold owners would happily sell for overnight paper profits. Others, with no trust in government, would keep their gold, choosing to wait and see.

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There will be a Panic Into Gold after the Panic Out of Paper Currencies

I think there’s going be a panic into gold and out of paper currencies. So this small up-move that we’ve gotten here since the beginning of the year, that’s just a harbinger. I think this time around, we’re looking at $2,000, $3,000 an ounce. I think it’s going be incredible. The question is why? Here’s the reason for a bullish outlook on gold, & how silver could hit $100 /oz.

Do Not Underestimate The Power Of This Year's Rally In Oil Prices

Oil futures are currently around $49, v/s $65 seen in the Q2 of 2015. If the futures market doesn’t expect the oil prices to rise, producers can’t lock in a profit like they might have at $65. If you can’t lock in a profit, you can’t produce as much & thus supply should theoretically fall. This has led us to say the futures price is far more important than the current or spot price.

Gold is a Permanent Menace to Government's Power over Fiat Money

Existence of gold in the economy is a constant reminder of the poor quality of government paper & it always poses a threat to replace the paper as the country’s money. Despite government backing of its prestige & its legal tender laws to fiat paper, gold coins in the hands of the public will always be a permanent reproach & menace to government’s power over money.

Gold and Silver Can Protect You from the Coming Bank Account Tax

Deutsche Bank thinks central bankers should go directly after people’s savings accounts. In other words, it’s lobbying for a wealth tax—or “bank account tax”—that would be a more radical version of negative rates. A bank account tax would promote more reckless borrowing and spending than we’re seeing already. When people realize it, they’ll pile into gold and silver.

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