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The environment for precious metals is changing

Cory
December 6, 2016

Today with Doc we take a close look a the short and long term outlook for the precious metals. This year we have seen a change in the investing environment and more recently a huge change in expectations once Trump was elected. Even though gold has not preformed well in the past month as we look forward to the next 2 years gold will begin to enter the radar of many more investors.

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Discussion
21 Comments
    Dec 06, 2016 06:42 AM

    Pain before gain guys so right. Inflation followed by hyper-inflation, meaning that Venezuela is coming to a country near you, where right now one ounce of silver buys 4-5 months worth of food.

    b
    Dec 06, 2016 06:56 AM

    easy to calculate how much is required anyway.
    Things will get straightened out in time.
    By that calculation Morgan was right in his estimation a person needs about 200 onces to keep his average sized family at least eating during the BS.

    CFS
    Dec 06, 2016 06:07 PM
      Dec 06, 2016 06:48 PM

      One word for Auryn: Accumulate!

        Dec 06, 2016 06:11 PM

        I have been and am quite happy with it.

    Dec 06, 2016 06:30 PM

    You can see from the long term charts in this article how the 1970’s as a period of inflation does not draw a close analogy to the present. But with stock markets setting new historic highs, even though commodities are presently deflationary, there shoukd be some concern about hyperinflation. Commodities have not fetched the return and lost their purchase on the collapse of oil prices.

    But what will affect gold prices most is the relationship with interest rates. There is mo law that says interest rates must remain above zero, and that it’s all over for QE or bond swapping.
    (goes back a few months)

    http://www.advisorperspectives.com/commentaries/2016/05/18/the-win-win-case-for-a-bull-market-in-gold-part-i

      GH
      Dec 07, 2016 07:15 AM

      Nice article, great charts. Thanks, Fransix.

    Dec 06, 2016 06:31 PM

    The environment for gold has indeed changed, but not in a way most gold bulls and bugs want to hear or acknowledge.

    I said immediately after it happened and what I said is truer than ever: the election of Donald Trump is a game changer.

    The gold pumpers and main stream media wanted you to believe Trump would be bad for stocks and good for gold.

    The exact opposite has happened.

    Although then countries debt burden is enormous and very late in the game, it is not too late.

    Expect stock prices to continue to out perform gold by wide margins for the next many years.

      Dec 06, 2016 06:30 PM

      Maybe, but maybe not. Sentiment, fundamentals, and cycles are all arguing for higher precious metals ahead, particularly in the years 2018-2020 when the public at large finally climbs on board.

      Sure, there is an abundance of gold pumper and charlatans out there. Avoid them. But if you look at the folks who have had success in the resource world for multiple decades, that carries significant weight and credibility. To each his own.

      GH
      Dec 07, 2016 07:32 AM

      Stock prices vs gold

      http://stockcharts.com/h-sc/ui?s=%24GOLD%3A%24SPX&p=W&yr=20&mn=0&dy=0&id=p16126138943&a=404174778

      Notice that the downtrend from the top was broken long ago and is now being back-tested, which is normal price action. So, priced in the S&P 500, by your criteria, the gold bear is over. If this ratio were to break below the 0.50 low set about a year ago, I would re-consider. But until then, I think that stocks will fall in terms of gold, and much more in terms of commodities, for years to come.

    Dec 06, 2016 06:51 PM

    If you talking inflation, are you guys saying that housing prices too will go up?

      GH
      Dec 07, 2016 07:39 AM

      Rick, I believe we’ll see inflation in commodities in general. So I imagine that will play into home prices in terms of the costs of materials. But real estate has been inflated already by historically low interest rates. And if people are struggling to put food on the table, they will spend less on housing. So, while I think house prices may continue to go up in nominal terms, I believe they will deflate in relation to commodities in general.

    Dec 06, 2016 06:35 PM

    Vaulting Ambition:
    http://marketvisions.blogspot.com

    $6,000 Gold & $300 Silver in 2021-2022. These targets are more than double my own, but the timeline is about right. What would the world look like with these prices? Not a very nice place, I’m afraid.

    Dec 06, 2016 06:40 PM

    These prices are completely unrealistic and will never happen.

    Don’t even bother entertaining the thought.

    Stocks will continue to beat gold hands down the next 4 to 8 years

      Dec 06, 2016 06:45 PM

      I have slightly more conventional stocks than gold holdings and will win either way. Yeeaahh! 🙂

      Dec 06, 2016 06:58 PM

      Big call James but i respect your conviction. We shall see. By implying that stocks will outperform gold, is your assumption based more on gold continuing to slide or stocks accelerating upwards?

    Dec 06, 2016 06:45 PM

    Gold and silver had a great big bull run, but it ended.

    Stocks, even though they are very expensive will continue upwards.

    Stocks are now the inflation hedge

    Dec 06, 2016 06:03 PM

    December 7th will indeed be a day of infamy for gold

      Dec 07, 2016 07:05 AM

      What a drama queen. I bet you’re wearing your tiara right now.

    Dec 06, 2016 06:12 PM

    How so?