We are now wrapping up one of the stronger summers in memory at USAGOLD and heading into the strongest time of year seasonally for gold and silver – September through February. Normally the summer months are the quiet part of the year, but 2016 has been an exception. The price of gold is up 9% since the beginning of June and silver over 18%. ETF gold inventories reached highs in July and August not seen since 2009, the year after the collapse of Lehman Brothers and the launch of the so-called credit crisis. Some see the stronger than usual summer showing for the precious metals markets as a harbinger of things to come.
Credit Suisse, for example, forecasts gold will be trading in the $1475 range in the fourth quarter of 2016, and see $1500 in the early part of 2017. Similarly, Deutsche Bank’s commodity desk believes gold should be trading now in the $1700 range based on the top four central banks’ aggregate balance sheet expansion – some 300% since 2005.
A large grouping of analysts compare stocks now with the market in the 2007-2008 time frame. The primary reason for the deja vu is that all the major indices once again appear to have been elevated in a Fed-induced price bubble. The list of famous names warning of a severe correction is long and grows by the day and with each new record high.
Bill Gross (Janus Funds)
Carl Icahn (Icahn Enterprises)
Paul Singer (Elliiott Management)
Robert Schiller (Yale University)
Russ Kostereich (Black Rock)
Ray Dalio (Bridgewater Associates)
Jeff Gundlach (Doubleline Capital)
Jim Cramer (CNBC)
David Stockman (former Budget Director)
Stanley Druckenmiller (Duquesne Capital)
Jacob Rothschild (RIT Partners)
. . . . . just to name a few. Even presidential candidate Donald Trump has joined the chorus of naysayers warning of a financial bubble.
This post was published at GoldSeek on 31 August 2016.