Ten Reasons Why Gold Will Remain Above $1250 in 2019
Fun fact- A healthy economy drops gold lower over time.
Read with caution
As far as investing goes, I read an indictment of economic policy from Trump in this.
After a healthy consolidation period below strong resistance around the $1300 region, here are ten reasons why I feel gold will remain above the $1250 mark before eventually breaking out over $1375 later this year:
- The U.S.-China trade war and a prolonged U.S. government shutdown continues to be a risk to financial markets. If equities continue to whipsaw investors, gold will benefit.
- With the Democrats now in control of the House, political turmoil is expected to fuel volatility into the 2020 election as the opposition does its level best to have Trump impeached. This war against Trump is undermining the confidence completely in government as a whole, which is very gold friendly.
- The Fed minutes from last month’s meeting, released on Wednesday, contained statements that brought to light a much more dovish sentiment among Fed members regarding policy change.
- A more dovish Fed reduces the odds for rate hikes this year. The U.S. dollar has come under heavy selling pressure and formed a significant top due to the Fed’s policy change.
- The gold/silver ratio is trending lower, meaning silver has begun to lead gold higher.
- We are witnessing the Yellow Vest Movement spreading from France to resource rich Canada and Australia. In Canada, the Yellow Vests are protesting over environmental sanctions that block pipelines and creating employment in the energy industry. There is also a growing fear that this movement will engulf all of Europe as the eurozone agenda has been to raise taxes and lower the standard of living.
- The clock is ticking as the Brexit deadline approaches and a “no-deal” Brexit looks increasingly likely on March 29.