ABN Amro Bank has just issued a report saying it believes higher gold prices are ahead in 2018. This comes especially as political and economic crises around the world continuing and growing.
The bank’s senior precious metals analyst, Georgette Boele, thinks the longer-term trend in gold prices is positive because the bank is negative on the U.S. dollar.
She’s not alone.
This pessimism about the future of the dollar is shared by many market analysts. It is also frequently mentioned by our own customers when they call us.
Boele’s forecast for the end of 2018 is $1,450 an ounce.
Boele argues that gold prices have stabilized and that precious metal’s recent price movement vs. its 200-day moving average looks promising.
CATALONIA INDEPENDENCE STRUGGLE STOKES SAFE-HAVEN DEMAND FOR GOLD
Gold rose last week after Catalonia’s declaration of independence from Spain sent global political uncertainty sharply higher. It also raised new and troubling questions about the long-term viability of the European Union (EU).
Spain has stripped just Catalonia, its most wealthy and independent region, of all local political and economic control.
It is seeking to reestablish order and authority over the rebellious region following Catalonia’s successful but controversial referendum to declare independence. Since then, demonstrators have rallied in the streets in peaceful but determined protests for both sides. The eventual outcome still hard to determine.
POLITICAL AND ECONOMIC CRISES IN EUROPE GROWING
RJO futures senior market strategist Dan Huffey says Catalonia may be a small microcosm but represents an unstable EU. Some are asking whether the EU can even survive the successive shocks of Catalonia’s attempt at independence, Brexit and the Greek debt crisis.
Huffey believes gold’s appeal as a safe haven has increased because Madrid’s strong-handed reactivity has stoked political risk and uncertainty. Catalonia is Spain’s richest region that arguably contributes far more economically to Spain than it receives in return.
Many experts thinks a unified Europe may soon be a distant memory as more and more cracks appear and underscore the area’s political and economic fragility. The crisis in the wealthy Spanish region could potentially drive Spain down economically and threaten the euro itself.
Commodities expert Dennis Gartman has said recently that he owns gold because of what he sees as central bank malfeasance. He believes central banks are playing with fire by implementing expansionary policies that weaken the euro and the dollar.
Last year, former Fed Chair Alan Greenspan observed that the root cause of market turmoil in Europe is a massive rate of slowing real incomes across the continent. According to Greenspan, real incomes are not going anywhere and that harsh economic reality is fueling political problems.
The political and economic integration of Europe is in for serious challenge in the days ahead. Despite strong collaboration between country leaders, the general population is suffering from years of austerity and central bank experimentation.
If the euro and/or the dollar head lower, experts like Gartman believe that gold and silver could benefit. At the very least, it is useful to think about how you might diversify your currency exposure away from just one currency by adding precious metals to the equation.
WORLD BANK: BULLISH ON PLATINUM
The World Bank recently released a research report that predicts platinum prices could rise by as much as 63% by 2030.
According to the World Bank, auto catalyst demand remains robust. Use of platinum in auto emissions is the largest component of platinum consumption year after year. In addition, new emissions regulations in Europe are anticipated to intensify platinum use. At the same time, mine supply in South Africa, which produces 70 percent of the world’s platinum, remains financially fragile.
With so much attention every day focused on gold and silver in the news media, it is easy to overlook physical platinum coins and bars. However, just like gold and silver coins, platinum is considered a safe-haven asset that can help diversify your physical precious metals holdings, gold IRA and/or overall retirement portfolio.
There are several physical platinum products that are IRA-eligible and well worth considering if there is a place for physical platinum in your portfolio or safe.
PREPARE YOUR PORTFOLIO FOR ALL WEATHER
The Catalonia independence situation has received scant attention from the mainstream media, but it is anything but fake news.
Catalonia’s declaration of independence is another sign that populism is here to stay in Europe. Especially as the global financial and political elite continue to ignore structural problems like stagnant incomes and massive unemployment.
Meanwhile, in the U.S., stocks are priced beyond perfection. Political gridlock and partisan fighting has intensified with the indictments of some of the current administration’s key former political campaign officials.
You owe it to yourself and your family to take charge in uncertain times and diversify your portfolio with physical, safe-haven assets that can help you sleep more soundly at night.