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Goldman Predicts $1,425 Gold Prices

Gold last traded at $1,293 an ounce. Silver at $15.63 an ounce.

NEWS SUMMARY: Precious metal prices rose Wednesday on safe-haven buying and a flat dollar. U.S. stocks rose as investors cheered strong quarterly earnings from major banks like Goldman Sachs and Bank of America.

Gold resumes climb toward $1,300 -Marketwatch
"Gold prices on Wednesday resumed their climb toward the psychologically important price of $1,300 an ounce, finding support from the turmoil surrounding the U.K.'s plan to leave the European Union and the upcoming vote of no confidence facing Prime Minister Theresa May's government. Caution among traders has deepen 'ahead of a no-confidence vote on British Prime Minister Theresa May's government and other geopolitical risks, including the U.S. government shutdown, loom large in investors minds,' said Mark O'Byrne, research director at GoldCore. 'Physical demand for gold coins and bars has picked up in the U.K. and Ireland, due to Brexit and U.K. political uncertainty,' he added....Gold appeared to gain more ground Wednesday following news that U.S. Speaker of the House Nancy Pelosi sent President Trump a letter to postpone the State of the Union speech, said Jeff Wright, executive vice president of GoldMining Inc. 'I think the sudden increase [for gold] is shutdown related, especially when it appears the Democrats have zero interest in engaging with the president or compromising,' he said. 'Also, as the partial shutdown is impacting Q1 GDP little by little.'"

bear market What's next for the dollar, gold, stocks & bonds? -Merk/Merk Investments
"In assessing our crystal ball for 2019, the starting point is the Federal Reserve (Fed) because they provide an anchor for the price of risk-free assets (Treasuries) around which risk assets are priced....The Fed had been on a set course to let its large Treasury holdings run off (engage in so-called quantitative tightening or 'QT') and to raise rates...In a recent panel discussion, Powell implied the path of quantitative tightening is not set in stone, and the Fed would be flexible. Similarly, Powell suggested the Fed can be very flexible, even lower rates on short notice should it be required. What??? The key thing that had changed is that some markets have thrown a tantrum, notably the equity markets....After Powell flip flopped to suggest the Fed could also be easing, equity markets surged....My conclusion is that, at the very least, volatility is to remain elevated...exacerbated by the Fed’s lack of clear direction....As we are approaching the end of the economic expansion, will king dollar be de-throned? In favor of a weaker dollar is an expectation of lower rates ahead, especially given the run up in recent years....If my crystal ball is correct, the price of gold may break out further to the upside when we are closer to the end of the rate hiking cycle. As recent history suggests, though, the time to diversify is ahead of the unfolding of actual events....All of this doesn't bode too well for equities. That said, historically, bear markets tend to mostly coincide with recessions...Investors have a certain risk tolerance; with volatility elevated and years of a bull market in equities, odds are their portfolios are riskier than they signed up for."

Goldman Predicts Gold Prices to Climb to Highest Since 2013 -Bloomberg
"Goldman Sachs Group Inc. is leading a pack of bullish voices cheering for gold. The bank's analysts led by Jeffrey Currie raised their price forecast for gold, predicting that over 12 months the metal will climb to $1,425 an ounce - a level not seen in more than five years. Bullion has benefited as rising geopolitical tensions fuel central bank purchases, while fears of a recession helped boost demand from investors seeking 'defensive assets,' they said....Speculative interest in gold signals investors are not only closing bearish bets but are also adding to bullish positions, Suki Cooper, an analyst at Standard Chartered, said in a note. Gold is also getting a boost from mounting speculation the Federal Reserve may pause in raising borrowing costs, boosting the appeal of non-interest-bearing metal. 'We expect the safe-haven bid, and to a lesser extent, gold's inflation hedge properties, to remain key drivers of the metal's price in 2019, complemented by a resurgence of physical demand,' Cantor Fitzgerald analysts led by Mike Kozak said in a report. Gold and silver are 'looking good in 2019,' underlining a potentially positive indicators that 'should drive a bullish case' for both metals."

The Most Absurd Myth of the 21st Century -Bonner/Bonner And Partners
"Every era has its busted myths and failed dreams. Wall Street and Washington wallow in them. The practical challenge for us is not to be smarter than other investors or wiser than other voters... but merely to step outside the myth long enough to get a good look at it....Assets, markets, companies, and empires rise and fall. No single one, or group of them, ever dominates for long. But now comes the most absurd myth of all - that the feds can 'manage' and 'guide' the economy, not only to make it better, but to make sure nothing bad happens....U.S. monetary policy for the last 30 years is nothing more than the classic three mistakes over and over. Mistake #1 - keep interest rates too low for too long. Mistake #2 - raise rates to try to mitigate the damage from Mistake #1. Mistake #3- drop rates in a panic when Mistake #2 causes the economy to crash. And that's just monetary policy. What about fiscal policy? The key concept of enlightened budget management is that fiscal policy should be countercyclical. You save (surpluses) when the gettin's good... and spend (deficits) when it ain't. Pharaoh did it 3,000 years ago - storing grain during seven fat years... and releasing it during the seven lean years. It's so simple, even a moron could do it....Since 1980, the feds have spent $20 trillion more than they have taken in. This year, spending will outpace tax receipts by roughly $1 trillion. And we're still in a recovery. Where is the promised growth? Where's the missing revenue? Of course, the idea is absurd. There is no plausible theory... and no observable case... where people get richer by borrowing more and more money, year after year. Instead, they go broke. It's only by saving money and investing it wisely that it is even possible to get ahead. And the feds are unable to do either."

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