Silver Soars 4%, Gold Consolidates On Dovish Fed

Silver rose 2% yesterday and has surged 4% this week to over $16 per ounce as the Federal Reserve flip flopped regarding interest rates and lowered its expectations for rate rises this year from four back to two or just one rate rise due to “global risks.”


Silver in USD (1 Year)

Gold is flat for the week but has consolidated on the 19% gains year to date and looks well supported especially given the real risk of renewed global and economic financial turmoil. The factors which led to this turmoil remain intact and continue to bubble under the surface, largely unnoticed as similar factors did prior to the financial crisis in 2007/2008.

Increasing questions about the policies of, the credibility of and indeed the wisdom of major central banks such as the BOJ, ECB and the Federal Reserve is supportive of the precious metals.

The Fed signals and ECB actions were even more dovish than expected and confirmed, if any confirmation was necessary, that ultra loose monetary policies are here to stay and may actually deepen.

Gold and silver are benefitting from this as ZIRP (zero interest rate policies) and NIRP (negative interest rates) are of course positive for gold and silver which are not negative yielding.

Silver at $16 per ounce remains 1/78 of the price of gold at $1,250 per ounce showing what good value silver is relative to even depressed gold prices.

Silver remains less than a third of its nominal price high at over $49 per ounce in 1980 and again in 2011. Unlike, most other commodities and indeed assets which are multiples of their nominal price highs in the 1970s and 1980 due to the very significant inflation of the last 36 years.

GoldCore continue to believe that silver will surpass its non-inflation adjusted, nominal high at just below $50 per ounce in the coming years. Indeed, we believe that silver will surpass its inflation adjusted high or real record high of over $150 per ounce in the next 5 to 7 years as depressed silver plays catch up and reverts to the mean versus stocks, property and other assets.

 

Gold Prices (LBMA)

18 Mar: USD 1,254.50, EUR 1,112.93 and GBP 868.78 per ounce
17 Mar: USD 1,269.60, EUR 1,119.40 and GBP 883.17 per ounce
16 Mar: USD 1,233.10, EUR 1,111.79 and GBP 874.09 per ounce
15 Mar: USD 1,233.60, EUR 1,112.56 and GBP 870.71 per ounce
14 Mar: USD 1,256.55, EUR 1,130.24 and GBP 875.89 per ounce

Silver Prices (LBMA)

18 Mar: USD 15.94, EUR 14.13 and GBP 11.02 per ounce
17 Mar: USD 15.78, EUR 13.86 and GBP 10.93 per ounce
16 Mar: USD 15.29, EUR 13.78 and GBP 10.84 per ounce
15 Mar: USD 15.32, EUR 13.81 and GBP 10.82 per ounce
14 Mar: USD 15.60, EUR 14.04 and GBP 10.87 per ounce


Gold News and Commentary

Gold set for weekly gain of 1% as Fed stance keeps dollar under pressure (RTRS)
Gold firms, dollar under pressure as Fed shifts stance (RTRS)
Yellen Reignites Commodities Rebound From Gold to Copper (BBG)
Oil hits 2016 high above $42 on production and demand outlook (RTRS)
R.I.P. Dollar Rally as Dovish Fed Spurs Worst Slump Since 2011 (BBG)

Silver Soars Post-Fed As Gold Ratio Tumbles Most In 5 Months (ZH)
Unless market volatility surges gold will remain ‘well supported’ (BI UK)
Global Currencies Soar, Defying Central Bankers (WSJ)
Dow’s Freakish Bounce Makes Investors Whole, Can’t Erase Doubts (BBG)
“We Have Gone Far From” Sound Currency – Greenspan (BBG Video)

Read More Here

 

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Mark O'Byrne

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