We have seen both gold and silver climb higher and higher over the course of 2019. Just as we forecast back in December 2017 when we first spelled out how gold and silver would be reaching for new annual average highs as 2021-2023 approached. In order for gold to climb by more than $400 in just a couple of years there would have to be serious upside movement for a sustained time frame. That timeframe is now underway. Not only is this happening in Federal Reserve Note traded gold we see it in other fiat currencies as well.
It was in other currencies that gold really shone…
Record Gold Prices
- British pound – £1,209.55
- Indian rupee – Rs 103,837.75
- Canadian dollar – CAD $1,938
- Australian dollar – AUD $2,180
- Japanese yen – ¥155,550
- South African rand – ZAR R21,929 – Source
Silver is going to find its way to higher ground and once the real movement in silver begins we are going to see similar types of moves on the silver charts as we are seeing in gold today. The one difference is, silvers moves will be much more pronounced. Silver has more ground, percentage wise, to make up than gold.
As we just reported on August 2, Gold Eagle Sales Crash Land in July, While Silver Eagles Continue To Soar we are already beginning to see the retail investor move away from gold coins and into silver coins due to golds lofty heights. This trend will accelerate as gold continues its upward trajectory. Silver will benefit immensely as more retail investors make the switch. I can already hear the naysayers screaming about “retail silver doesn’t matter to small a percentage”. I couldn’t disagree more and have disagreed for years.
American Silver Eagles (ASE’s) are the single largest stock pile of above ground silver in the world. That matters. Not only does that matter, it matters a lot. Can you imagine ASE’s beginning to sell 40million+ coins a year for the next two years? I can’t. I don’t think the silver market could take the impact.
What is always overlooked when discussing the sell of ASE’s is the fact that all the other major mints around the world begin ramping up sales as well. Royal Canadian Mint, Royal Mint (England), Perth and all the rest will see silver coins, bars and rounds begin to far out sell gold products.
As you can see in the charts below, courtesy of SilverPrice.org, gold is in “open air” and silver is climbing, climbing, climbing to the $20.00 mark. Once silver breaches, and holds, above this line the real battle will begin at $21.25. We are getting a little ahead of ourselves but we see this as being – with current tailwinds blowing strong – a possibility later this year or possibly as early as 2nd quarter 2020.
It seems as if Bloomberg agrees with our assessment as they reported earlier today
The metal advanced as much as 1.3% to $1,503.30 an ounce on the Comex, the highest since 2013. The move extends this year’s climb to 17%, with gains underpinned by inflows into exchange-traded funds. Central banks in India and New Zealand both surprised markets on Wednesday with bigger-than-expected interest rate cuts, boosting speculation others will follow.
Silver, gold’s cheaper cousin, also surged. Spot prices rallied as much as 2.2% to $16.8082 an ounce, the highest in more than a year.
Gold has been one of the chief beneficiaries of the turmoil in global financial markets as Washington and Beijing spar over trade. In recent days, the Trump administration threatened fresh tariffs against Chinese goods, the yuan was allowed to sink, and the U.S. branded China as a currency manipulator. The stand-off has boosted the odds of more easing from the Federal Reserve.
“Gold is serving its traditional role as a safe-haven asset,” said Wayne Gordon, executive director for commodities and foreign exchange at UBS Group AG’s wealth management unit. Under the bank’s risk case, marked by a further escalation of the trade fight, prices could go as high as $1,600, he said. Source
