As 2015 rang into 2016, both silver and gold ended their final trading sessions at prices below their 2014 close.
Gold finished its last trading session at $1,061.90/oz., compared to $1,184.30/oz at the end of 2014. Silver closed 2015 at $13.84/oz., down from $15.64/oz. a year ago.
ARE YOU OPTIMISTIC?
You should be. Gold and silver investors have many reasons to look up in 2016.
In recent months, we’ve seen precious metals flirting with multi-year lows going back as far as 2010, This has created a flurry of interest from buyers thinking about long term bullion acquisition plans or considering gold or silver as a diversifier in their IRA.
In addition to gold and silver’s historically low prices, strong physical demand by banks and small investors, and stock and bond markets looking expensive, we also have a highly contentious political period just ahead.
GOLD ANALYSTS WEIGH IN
Benzinga analyst Jeff Clark released an article that points to several positive fundamental developments in the gold market:
Record physical coin sales and strong continued demand from retail investors
High demand for gold coming from global central banks, especially China
Stocks hovering at a historically expensive level relative to gold. An overdue bear market in stocks could trigger additional gold buying
Metals analyst David Morgan was quoted in Seeking Alpha that he believes we could be close to a bottom in both gold and silver. He sees a decline in Treasury bond prices ahead, which could result in investors moving their money from Treasuries into precious metals.
Analyst Avi Gilburt believes a gold bull market could resume in 2016. He also advises that investors seeking gold and silver exposure should focus on physical precious metals rather than mining stocks, where he sees less opportunity.
POLITICAL SEASON AHEAD: EXPECT SQUALLS
Since earliest recorded history, gold and silver have always been especially attractive in times of economic or political unrest.
This year, we expect to see extremely bitter fighting between the parties (and even within the parties). This will no doubt have an unsettling effect on stock and bond markets as the future of the nation’s economic policy is hotly debated.
For those that think of gold as a way to protect against a declining dollar, consider this: overseas, our allies and trading partners will be valuing the strength of the American dollar based upon how they view the future stability of our political system and the apparent wisdom of our monetary policy.
The dollar is still strong, but other currencies are gaining on us as reserve currencies. Our circus-like political proceedings only feed this erosion of trust!
In times like these, having a little gold or silver in the safe is of considerable comfort to anyone, regardless of your political leanings.
