Gold Makes New 2019 High Of $1,358, While Silver Can’t Break Resistance

	In Gold We Trust #3
	Governments around the world have recently been on a “Gold-buying spree.” These countries have a tactful reason for doing so, and this reason is directly tied . . . . Darius Shahtahmasebi (Read More)

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Gold reached a new 2019 high of $1,358 per ounce last Friday during trading. At that point the Gold price saw short-term profit taking in late trading, closing at $1,340 per ounce. Friday’s trading was the second attempt by Gold to break above the key $1,350 per ounce resistance level. It would be healthy for the Gold price to establish a new trading range from $1,320 to $1,350 for a while, before making the third attempt to break the $1,350 resistance level. After breaking $1,350 level, Gold should consolidate the recent gains and build a base for the move to $1,400 later this summer.

This week the Federal Reserve will be giving a press conference and providing indications of when they could be lowering interesting rates. The major reasons for Gold moving higher last week and for the rest of the year are listed below.

12 Major Reasons Why The Gold Price Will Reach $1,480 By Year End

1) The Federal Reserve Policy

Statements by Fed Chairman Powell were the primary causes for Gold’s move higher and will contribute to Gold reaching my 2019 prediction of $1,480 per ounce.

A) On June 4th Federal Reserve Chairman Powell discusses the Fed's preparedness to act on cutting interest rates if necessary due to trade and other risks.

 

B) The Interest rate on the 10-Year Treasury Note dropped to a low of 2.08% (lowest rate since 2017).

 

C) 2019 will be the second year in a row the Fed would be prepared to add $1 trillion to fund the national debt.

 

2) US Dollar Index

The U.S. Dollar Index has dropped to 95.97, down from 98 in late May. Lower interest rates normally lead to a weaker U.S. Dollar, which is bullish for Gold

3) Brexit Negotiations

Any settlement should be helpful to the value of the Pound Sterling and the Euro, driving the Dollar lower, which would be helpful for the price of Gold.

4) Global Physical Demand Is Soaring For Gold

In addition to record Central Bank Gold demand in 2019, investors in 72 other countries, when measuring the Gold value in local currencies, are aggressively buying at record highs. Buyers in countries like India, Russia, Canada, Japan and 68 other countries are aggressively buying Gold at an All-Time High.

5) Debt

The U.S. national debt is now over 22 Trillion Dollars, but that is a drop in the bucket compared to Euro countries and Japan. It is estimated by the Institute of International Finance that Global debt currently is over 250 Trillion Dollars. It is highly likely to continue to grow in 2019 and will be bullish for Gold demand.

6) Gold And Silver Becoming Legal Tender In The United States

11 States have passed or currently have pending legislation to make Gold and Silver legal tender. These states clearly are concerned about the future value of the U.S. Dollar.

7) Mine Production Of Gold Has Dropped For 3 Conservative Years

Basic supply/demand fundamentals. The World Gold Council reported Gold mine production fell again in 2018 as the cost to produce Gold increases.

8) China Is Trading U.S. Equities And Dollars For Gold

China continues to build a sizeable stockpile of Gold. It is believed that China will soon back the Yuan with Gold. The IMF has just added the Chinese currency to its highly respected basket of reserve currencies. This will be a great help to China in its effort to replace the U.S. Dollar as the world’s primary reserve currency. The IMF requires countries to hold U.S. Dollars as reserves. If the Yuan replaces the Dollar, it will be disastrous for Americans and the price of Gold (in Dollars) would soar.

9) Basel III Will Encourage The World Banks To Hold Gold

In the Basel III agreement, which is being implemented by the world banking system between 2017 and 2020, Gold has been upgraded this year from a Tier III asset to a Tier I asset. This will encourage many large banks to increase their Gold holdings and make loans on Gold.

10) Geopolitical Problems Continue To Help Gold Demand

Whether it be a trade war with China or problems with Russia, Iran, Syria or North Korea, it’s bullish for Gold. Investors are motivated to buy Gold (the ultimate safe haven investment) when geopolitical problems reach the news.

11) Government Gold Repatriation Continues To Grow

Stockpiles of Gold in U.S. depositories continue to drop, as one country after another continues to repatriate their Gold. This could soon cause a Gold short squeeze.

12) Gold Is Making New 2019 Highs

Commodity technicians believe this will be the year Gold breaks above $1,400 per
ounce. They point out that since 2015 the Gold price has been making higher lows from $1,045 to $1,160 per ounce. While Hedge Funds increase their Gold contracts and options by 38% to 174,233 contracts in the week ending June 4th, the largest position since 2007.

Today: With the U.S. Dollar Index moving over 97, Gold reached a low of $1,332 per ounce in Asia before finding major buyers. At that point the Gold price picked up a quickly crossed the $1,340 level. It would be very good for Gold’s long-term outlook to consolidate between $1,320 and $1,350 for a short period of time.

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Silver traded at $15.01 per ounce on the opening last Monday, and it was downhill for the balance of the week, closing at $14.79 on Friday. Many professional commodity traders and CME floor traders don’t like Silver and would prefer to be short. These traders have been short-selling Silver every time it nears the $15 resistance level, especially when Gold broke above the $1,350 level.

The only thing that will change the trader’s sentiment is for Silver to move above $15.25 per ounce on good trading volume, and they will cover their short-sales. This coming week, if Gold takes a short consolidation pause, I expect Silver to retest the $14.50 level.

The important Silver-to-Gold ratio, has dropped to an unbelievable 90.23-to-1.

Today: Silver weathered this morning's Gold correction well, with it only dropping to $14.75 per ounce before rallying back. Investment interest in Silver is picking up in Asian and European markets.

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