Last Week Was A Great Week For Gold And Silver Investors

	Gold A Winner As Trade Tensions Fan Global Downturn Fears
	Asian markets moved mostly lower overnight, European and U.S. stocks are pointing to a softer open and oil slipped to a multi-month lows as concerns grow that new . . . . London Capital Group(Read More)

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Gold
Silver
Recommended Investment Commitment And Diversification

Last week was great for Gold investors. Gold reached a new 2019 high of $1,348 last Friday and closed the week at $1,341.20, up $35 for the week. Gold was up everyday last week and had an incredible trading volume of 1,681,000 hundred-ounce contracts (16.8 million ounces).
Gold reached a recent all-time high of $1,920.80 on Sept. 6th 2011, but over the past five years (2014-2019) Gold has had a low of $1,045 and a high of $1,390 per ounce. It would be healthy for the Gold price to establish a new trading range from $1,320 to $1,350 for the balance of the month. This would consolidate the recent gains and build a base for the move to $1,400 later this summer. Gold hasn’t broken above $1,400 for the past five years, and why do I think Gold will do it in 2019 and reach $1,480 before the end of the year?

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 of Gold’s move above the $1,340 per ounce level and will contribute to Gold reaching my 2019 prediction of $1,480 per ounce. He said and indicated:

• 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 2.09% (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) U.S. Dollar Index

Last week the U.S. Dollar Index 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 is currently 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 consecutive 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: Profit taking hit the Gold market this morning, with the price dropping to $1,324 per ounce. In the past three weeks Gold has rallied $70 per ounce, a dramatic and quick move from $1,275 to $1,345 per ounce. 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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From a new 2019 low of $14.25 to breaking a closing above the key $15 per ounce resistance level last week. Silver, was up every trading day last week closing at $15.01. Silver trading volume on the CME exchange was high last Friday. Why, because good number of professional commodity traders were making short-sales. Silver’s price performance is still disappointing considering the $35 increase in the Gold price last week. This coming week, if Gold takes a pause, I would expect Silver to retest the $14.50 level.

The important Silver-to-Gold ratio had dropped to an unbelievable 89.41-to-1 this past Friday

Today: Short term profit taking and short sales took the price of Silver down $0.31 per ounce to $14.69 this morning. Silver badly needs to build a base above $14.50 before its next attempt to break above $15 per ounce resistance level. With today’s drop, the Silver-to-Gold ratio has gone over 90-to-1.

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