Ignore Banks’ Bearish Statements on Gold
By Jeff Clark, Senior Precious Metals Analyst
Goldman Sachs has recently cut its gold price forecasts, predicting a decline to $1,200. Credit Suisse and UBS share a similar bearish outlook, while Citigroup claims that the gold bull market has ended.
So, is it time to give up on gold?
Not just yet. As we’ve noted previously, many analysts have consistently erred in their predictions regarding gold during this bull cycle. Moreover, history provides compelling reasons for skepticism. We’ve seen similar scenarios unfold before. For instance, during one of the greatest gold bull markets in recent history, which peaked in 1980, gold underwent a dramatic 20-month decline. Each time it appeared to stabilize, it would plunge again. From December 30, 1974, to August 25, 1976, gold dropped an astonishing 47 percent.
The year 1976 must have been particularly challenging for gold investors. With prices already on the decline, they continued to fall, echoing the challenges we seem to be facing today. This made me curious about what the experts were predicting back then. Continue reading
The unemployment rate remains stubbornly elevated. However, aside from that, the economy appears to be showing signs of improvement. While concerns about the dark clouds on the horizon from Cyprus could dampen stock market momentum, it’s worth noting that the market has needed a pause for quite some time.
This week will bring more clarity. Today, reports on durable-goods orders, consumer confidence, and new home sales will be released. Later, we will see the revised 4th-quarter GDP figures and weekly jobless claims announced on Thursday. By Friday, consumer spending and sentiment data will be available.
Rest assured, we’ll keep a close watch for any hints about what lies ahead. Have the negative sentiments born from the 2008 financial crisis and Great Recession finally shifted towards optimism? Are we finally seeing the dawn of better days ahead?
From my perspective, it certainly feels that way. Consumers are actively spending, and producers are ramping up production. For the first time in years, a renewed sense of confidence seems to be returning to the economy, much like migratory birds returning to Southern California in the spring. Continue reading
Wow! Just when we thought we had witnessed it all, something astonishing occurred. What an unexpected turn of events…
The small island nation of Cyprus has managed to ruffle feathers across the entire European continent, which is currently experiencing a wintery chill reminiscent of December. For a brief moment, when the Cyprus legislature sent a resounding message to the EU, ECB, and IMF—rebuffing their “stability levy”—we were filled with anticipation. It seemed like we were on the verge of witnessing mass bank failures.
Indeed, the loss of deposits might have been worth the cost of sidelining an entire nation’s banking elite. Moreover, the resulting public outcry could have set a precedent for sound banking practices that might endure for generations. Future generations in Cyprus could inherit a financial system built on solid ground rather than a shaky foundation of paper assets.
However, it soon became clear that politicians had other, less honorable plans for resolving the crisis. Reports suggest that one option may involve seeking financial assistance from Russia. Continue reading
Former Federal Reserve Chairman Alan Greenspan made headlines on Friday when he asserted that the recent highs in the Dow and its ten-day rally were not indicative of “irrational exuberance.” Coincidentally, the Dow then took a 25-point dip, ending its streak of gains since March 1.
Those who remember the late 1990s stock market boom will recall Alan Greenspan’s famous question regarding the prevalence of irrational exuberance. On December 5, 1996, he posed this query during a speech at the American Enterprise Institute…
“How do we determine when irrational exuberance has pushed asset values to unsustainable heights, leading to unexpected and prolonged downturns, as we have seen in Japan over the last decade?”
“As central bankers, we need not be overly concerned unless a collapsing asset bubble threatens real economic stability—affecting production, jobs, and price stability,” Greenspan added. “However, we must not underestimate or grow complacent about the complex interactions between asset markets and the broader economy.” Continue reading
### Introduction
In light of the current economic climate marked by fluctuations in various markets, this collection of articles highlights critical analyses of gold prices, employment statistics, and emerging global financial trends. By examining insights from experienced analysts, we hope to clarify the complexities that define today’s economic landscape.
### Conclusion
Navigating the financial world can be intricate, especially during uncertain times. As we dissect various elements from gold projections to evolving market dynamics, it’s essential to remain informed. The perspectives shared in these articles provide valuable context as we look towards the future of our economies and investments.
