“Too-big-to-fail” bank Citigroup has not been shy of late in proclaiming its affection for gold. A strongly bullish take on gold is not something people are used to hearing from the world’s largest financial institutions, but Citigroup has been a bit of an anomaly in that regard. Only a few weeks ago, Citigroup was pointing out how the lack of a rate cut could send gold soaring. Now, it is detailing why the likelihood of a drop in interest rates could fuel a 15% rise in gold’s value. Citigroup is clearly aware of the wide variety of ways gold can benefit significantly from even slight changes in the economic environment. Are you aware of this?
- Will gold appreciate 15% in the next 12 months? According to analysts at “too-big-to-fail” bank Citigroup, gold buyers stand a good chance of making just such a return. On the heels of the Federal Reserve’s suggestion that already low interest rates are on the way down, it appears a lot of pent-up demand for the metal is now becoming quite apparent. Gold has already jumped about 10% in the last 30 days, and Citigroup analysts believe the move of interest rates down to zero combined with associated persistent weakness in the global economy will ensure gold’s strength for some time to come. Refer to MarketWatch for more information.
- Sven Henrich, the founder and lead market strategist at northmantrader.com, says the Federal Reserve’s apparent bias now toward lowering interest rates proves, in part, that the entire socioeconomic and sociopolitical landscapes are different from anything we’ve ever seen before. Saying “the great collapse” is “unfolding in front of us,” Henrich cites among his evidence astounding levels of corporate and government debt, the dearth of tools available to central banks to combat a new recession, deficits in the trillions of dollars, and “social divisions and political extremes.” And the only thing keeping the “fragile system” from collapsing outright for the time being is a bizarre stance to lower already-low interest rates, which Heinrich and others believe only delays the inevitable.
- Do you know what the problem with trying to fix broken economies is? The remedy frequently leads to an even worse economic environment than the one being “repaired.” So say Jim Reid and Craig Nicol, strategists for Deutsche Bank. While conceding that extreme monetary policy measures have fueled economic expansions, the pair detail how said measures also have led to a plethora of negative consequences including “higher structural budget deficits, higher private sector and government debt … negative real yields, inflated financial asset valuations … and a financial system that is prone to crises.” The end result? The creation of a sort of super-recession impervious to any remotely practical measures that can be thrown at it. “We’ve created an environment where recessions are a global systemic risk,” say Reid and Nicol. For additional insight, refer to realinvestmentadvice.com.
Is a new bull market in gold underway? Citigroup doesn’t go quite that far in its optimistic assessment of gold’s near-term future, but plenty of observers with expert credentials are saying gold has plenty of room to run on the upside. One of them, hedge fund giant Paul Tudor Jones, recently said once gold reaches $1,400 an ounce he expects it to rise another 20%. The point is that even though smart minds disagree on just how high gold might go from here, a whole lot of them are saying its prospects in the near term are excellent. Is it time for you to board the gold train? Call Augusta Precious Metals at 800-700-1008 or visit Augustapreciousmetals.com.