Welcome to illuminati silver, we tell you
the truth about silver. Today is Wednesday 24th February 2016 and
we are providing the third and final part of 3 videos as to our predictions for gold
and silver for this year. Video 1 in the series identified the 11 main factors we take into
account when assessing the gold market. Video 2 highlighted the factors we take into account
when assessing the silver market and some of their implications.
In summary, the key factors we take into consideration, when assessing future prices and trends are:
1. Value of the U.S. Dollar 2. Value of Individual Countries currencies
3. Interest Rates 4. Inflation
5. Supply vs. Demand 6. Government Reserves/Holdings
7. Central Bank Instability 8. Quantitative Easing
9. Speculation 10. ETF’s, Futures, Comex
11. Global Crisis – Safe Haven Investment 12. Jewellery and coin demand
13. Silver as an Industrial Metal 14. Buying from China and India
15. Trend Analysis and Technical trading 16. The Gold to Silver Ratio
17. Gold to silver correlation 18. Politicians and Political dogma
Most of these were included and explained in videos 1 & 2.
The area we did not include, and is worthwhile mentioning, is the issue of Psychographics
which is the study of personality, values, opinions, attitudes, interests, and lifestyles.
Most marketers will include this area and regard it as a key proponent of their analysis
when considering creating new products or entering new markets and the same applies
to investment decisions. So getting back to the point in hand, and
before we give our forecast for future prices, which we frankly dislike doing for the short-term,
as we are fundamentalists and therefore are more interested in the medium to longer term
– i.e. 5+ years, we have to give a caveat. Namely:
Although we have taken geopolitical issues into account our forecasts are based on a
black swan event not occurring e.g. should an unexpected war break out, a world leader
is assassinated or a meteor strikes the Earth or something equally as significant and is
therefore unforeseen. So with this in mind let’s look at silver.
According to the Silver Institute they predicted in January that they expect silver for industry
to increase its share of total demand in 2016 from the 54% experienced in 2015. Whilst this
may be the case, bearing in mind that industrial silver stood at 56% in 2014 we do not foresee
this 54%-56% range being exceeded. If anything, should the world economic growth and especially
that of China, decline further, then we can envisage zero increase in the existing 54%
figure. And before anyone quotes solar panels at us, it must be pointed out that although
the demand for these are likely to rise in 2016, so too will the use of aluminium as
a substitute, which is significantly cheaper and a potential decrease in demand for electronic
devices. Last year 130 moz of silver coins were demanded
and we envisage a similar if not slightly higher figure being acquired this year. Also,
with India importing 228m oz of silver bullion in 2015, with the possibility of more favourable
tax treatment, we may indeed see this figure rise by 5% – 10% in 2016.
On the supply side, the Silver Institute forecasts a fall by 5% for 2016. We agree with this,
unless prices actually rise further and the price of oil remains low.
Overall we therefore see silver for 2016 trading in the same range as experienced in 2015 between
$13 – $17.50. We must bear in mind, that the first two months of this year has already
witnessed an excellent rise but there is resistance at the $16 level and significant resistance
at the $17.50 level. The GFMS team at Thomson Reuters forecasts silver prices to average
$15.51/oz for the full calendar year and this ties in well with our price range of $13 – $17.50.
We were anticipating pull backs from this time onwards, but they have not as yet occurred
and may hold out longer than we originally anticipated.
With regards to gold opinion is divided. Last year’s London Bullion Market Association’s
2015 Gold Forecast winner Bernard Dahdah of French Investment and Bullion Bank Natixis
predicts that the gold price will drop through the $1000 level in the first 3 months of 2016
gradually declining to end the year at $950 as he foresees that gold prices “will be
driven by the expected path of interest rate hikes” from the US Federal Reserve.”
Goldman Sachs Bank predicts a price range for 2016 to vary between $1300 – $900 as the
“fear over China, Oil and Negative Interest Rates are overstated”.
Saxo Bank too predicts that gold will fall back but to a level at or around $1168.
We, surprising to some, slightly disagree, certainly for the first quarter of this Year.
We can see gold maintaining its current level as many banks are discussing negative interest
rates and Governments predicting more QE. Poor Trade figures both from the US and Europe
will make interest rate rises not only unlikely but the introduction of negative interest
rates a possibility. Even the Bank of England has mooted this possibility in recent days.
The United Kingdom in particular has the Brexit or exit from the EU vote to consider over
the next few months, and this will prove destabilising for Sterling which has already seen its value
fall 9% on the Year and many predict that should a vote for EU withdrawal be successful
the value of sterling could fall by 20% or more. This means that regardless of the dollar
price of gold and silver, their prices will continue to rise or at least maintain their
existing levels. Since the beginning of January, gold has risen from £720 – £893 an oz a
considerable £173 rise or 24%; whilst in dollar terms it has risen from $1060 to $1244
an increase of $184 or 17% thereby showing a 7% currency disparity. Contagion and concerns
spreading to other EU countries at this time also cannot be ruled out.
With Central banks heavily buying gold and our contacts in Switzerland and Hong Kong
advising that gold is still being acquired at a considerable rate with increased interest
by certain Fund Managers, we are very positive on gold prices over the next few weeks, despite
traders forecasting significant pull backs. We are of the opinion that gold this year
will trade higher in the first half and fall back in the second half of the year in US
dollar terms, and may very well rise above the $1300 and possibly touch the $1350 level
short term where considerable resistance will be met.
Our gold range therefore for 2016 stands currently at a trade of between $1100 – $1350 and only
if the FED actually raises rates can we envisage it falling below these levels.
We have always said that the floor for gold and silver was $1000 and $12 respectively
with possible very brief spikes below. Neither of these levels were reached though gold did
come quite close and silver just over a $1 off. Circumstances this year have changed
and the political environment is causing much apprehension such as Brexit and the possibility
of Donald Trump winning the Republican nomination and even the Presidency. Whether either of
these are good or bad, regardless, they create instability and gold and silver, likes and
benefits from, uncertainty. We are not oblivious to economic slowdowns nor are we oblivious
to Harry Dent’s trend analysis. However we are witnessing funds moving out of the
stock market and into gold, currencies devaluing, thereby making gold more expensive and the
possibility of negative interest rates being introduced or increased around the world,
thereby undervaluing the stated country’s currency even further.
If we were living in any of those countries like the UK and Canada and elsewhere, where
we believe our currencies may fall further against the US dollar, then we would consider
buying gold on dips. Silver in Europe is a very long term bet because of the VAT charged
and that even at $17.50 silver, one would only break even at current purchasing levels.
However, as we still expect the US dollar to remain relatively strong then silver is
an OK buy in our view below $15 but preferably below $14 should they reduce to that level
and gold sub $1200. Providing you do not hold 10% precious metals in your investment portfolio
we believe you should consider acquiring some as a hedge against uncertainty, currency devaluation
and turmoil. For the record and we wish to make this abundantly
clear; we do not believe that Gold is going to suddenly rise to $5000 an oz as Rob McEwen
(Founder of Goldcorp and now CEO of McEwen Mining) did on Palisade Radio on 28th January
2016. Or as Peter Schiff predicted on Elite New World Order Agenda on 16th May 2015; or
skyrocket as he predicted on Greg Hunter’s USA Watchdog on 10th February 2016. Nor do
we believe in Jim Sinclair’s prediction again on Greg Hunter on 25th August 2015 when
he said gold is going to $50,000 an ounce and that silver will be gold on steroids.
We all have to get serious about what is actually happening. Silver is benefitting from Gold’s
attraction as a monetary metal but is suffering because of falling or stagnant Industrial
usage. Economic conditions are not conducive to increases in demand for Industrial purposes,
but are attractive to exchange fiat for precious metals and what is difficult to gauge accurately
is the subsidisation effect of one for the other, especially with regard to silver. We
do not see economic collapse in 2016 though we do foresee much turmoil in both Stock Markets,
Currencies and other asset inflated markets. Added to this, the many reasons why gold and
silver prices should fall, will be counteracted by this uncertainty and the desire at least
for now to hold onto gold and silver as a hedge. We hope you have found this video interesting
and informative and if so, please give it a thumb up and share it on twitter. Also kindly
visit our website at www.illuminatisilver.com and look at our Facebook page which is updated
daily at www.facebook.com/illuminatisilver Disclaimer: Illuminati Silver owners come from a background
of Banking, International Wealth Management and Economics. Having now retired from these
worlds we are not qualified to give investment advice. Therefore, this and other productions
must not be deemed to be giving such advice and merely represent the personal views of