Gold Silver Reports — Each week, we hear from more mainstream analysts turning bullish on gold or increasing their previous price projections for the yellow metal. Last week, we reported on one JP Morgan executive who predicted $1400 gold this year. Now we hear from Bob Michele, JP Morgan Asset Management’s global chief investment officer and head of fixed-income and commodities.
He said that “It’s certainly a time that people want to get into gold. I think there’s no doubt that central-bank policy response has unleashed the gold bugs. One of the big knocks on gold for a long time had been that it had no yield. Well, if you’re in Europe, if you’re in Japan, no yield is high yield. You throw on top of that a currency-devaluation war under way… toss into the mix China and Australia, and suddenly gold is an alternate currency, certainly to paper money. So I think the intermediate and longer-term trend for gold is very, very bullish.”
According to Ole Hansen, head of commodity strategy at Denmark’s Saxo Bank, last week’s correction is a great buying opportunity. “While a stronger dollar will create a more challenging environment for gold, the focus may turn to rising inflation, which, combined with very low interest rates elsewhere, will continue to support gold in the coming months.” He also pointed out that there are trillions of dollars’ worth of government bonds offering negative yields, making gold attractive as a safe haven. Saxo Bank has also updated its 2016 gold price forecast to $1,400, although there will be corrections along the way.
Dennis Gartman has long been a fan of gold, but he previously said he only likes gold in terms of the euro or yen. Now, he is bullish on gold in U.S. dollar terms, too. Speaking on CNBC’ Squawk Box last week, he said that he is not a “gold bug” and does not believe “the world is coming to an end” but he does think that inflation is beginning to pick up. He pointed to rising prices in several commodities as signs of a new inflationary trend. He said the combination of these trends “have to argue for stronger gold prices.” — Neal Bhai Reports