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Reno Chris

Ubs Bank Sees Gold Averaging $1,250 In 2016

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In a recent report, UBS bank, a major international player, sees gold averaging $1250 an ounce in 2016. Its not a huge move up, but its better than we've been for gold prices in the past 6 months. Has gold bottomed? Will it begin a slow rebound in 2016 and China, Japan and Europe all continue to pump fiat money into the world economy?

I think gold will improve, but I am skeptical of a big move upward very soon. I think UBS has it about right.

 

For more info, see:

http://www.kitco.com/news/2015-10-09/UBS-Sees-Gold-Averaging-1-250-In-2016-Any-Weakness-Unlikely-To-Be-Sustained.html

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It's been a great year if your an Aussie. Gold has gone up about $200 an ounce here to $1600. Don't know what caused our dollar to drop but hope it keeps going!

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Though I'm not a conspiracy worshiper, I do acknowledge that every participant in every market acts to manipulate the deal in their behalf. Nobody starts dickering by saying, "You need to raise the price by about 23% to get me to buy it."

 

That being said, banks are in it for the money. When physical PMs are bought, the revenue stream stops. Ergo anything that a bank can do to convince people with monetary assets to avoid investing in goods that have durability will force the people to keep the money moving.

 

It is called velocity of money and it has slowed substantially.

 

UBS has perhaps signaled that the banks want gold to go not much higher than $1250USD and lower would be preferable. And the harsh reality is the mere jawing by the bankers will go a long way to forcing a self-fulfilling prophecy.

 

Keep in mind that very few people are debt free and fewer still own substantial assets as well. Most folks are in debt past their gills and a large share of investors are highly leveraged. These folks desperately need assets to appreciate in order to cover their debt load. The UBS statement can go a long ways toward keeping folks out of the PM market.

 

Low PM prices are a gift. Tis difficult to create generational wealth when prices are high. Might I suggest that folks download and read, "The Richest Man in Babylon" by George S Classon. It is free. The only significant difference between the time it was written and now is that gold is no longer the coin of the realm. However, gold is very desirable collateral. Why else would central banks be holding and in many cases increasing their stash?

 

The miners will hurt from continued low prices, but a big share of that hurt was self-inflicted. Whether it is corporate, private or government, good times bring on a massive spending spree with borrowed money. Even relatively minor not-so-good times can make debt onerous. Extensive drops in prices for longer periods coupled with debt can and do wipe out even the greatest corporations.  Does "Too big to fail" ring a bell?

 

But then again, I am not an analyst, financial adviser or Prophet. Do your own due diligence. And as the poster on Agent Mulder's wall in "The X-Files" states, "Believe No One". Or the Latin phrase, "Cui Bono", who benefits?

 

Do as you inevitably will. But no whining!

 

'I never saw a wild thing sorry for itself. A small bird will drop frozen dead from a bough without ever having felt sorry for itself.'
---D.H. Lawrence ---

 

eric

Clay likes this

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Gold is up to $1186 this morning, highest in 3 1/2 months. Sure would be nice to see it back at $1200 where it was for a while.

However, I am still skeptical to call that a bottom and say that the low is in and it wont go back down.

 

For more info, see:

http://www.cnbc.com/2015/10/13/gold-near-3-month-high-on-hopes-of-delay-in-fed-rate-hike.html

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And now, with the increase in interest rates from the FED seeming nearly guaranteed to happen in December, gold and other metals have rocketed downward to much lower prices.
Gold is at $1092 and Silver at $14.54 as I write.......

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