Gold and Silver Price forecast 2016 – by illuminati silver (part 1 of 3)

Gold and Silver Price forecast 2016 – by illuminati silver (part 1 of 3)

Welcome to illuminati silver, we tell you
the truth about silver. Today is Wednesday 17th February 2016 and
we are providing the first of 3 videos as to our predictions for gold and silver for
this year. We had proposed to produce just 2 videos, however their length would have
been too great and so we have produced 3, todays covering Gold, Friday’s covering
Silver and Sunday’s covering our actual pricing, supply and demand forecasts.
So in order for our subscribers, viewers and listeners to understand how we come to our
conclusions, we have highlighted those factors we take into account. Today we are looking
at what actually influences the price of gold in today’s economy. There are 11 main factors: 1. Value of the U.S. Dollar
The U.S. dollar is still the world’s dominant reserve currency, making it one of the main
currencies that different countries hold for international trade. The price of gold and
the strength of the dollar have a pretty clear inverse relationship; when the dollar is strong,
gold tends to become weaker, and vice versa. Whilst this is not always the case it does
apply in the majority of instances. We have seen over the past 12 months, the dollar index
gyrate between 92 and 100 most of the time being spent in the upper 90’s. 2. Interest Rates
Gold does not pay interest like treasury bonds or savings/investment accounts or dividends
like shares, but current gold prices often reflect increases and declines in interest
rates. As interest rates rise, gold prices may soften as people sell gold to free up
funds for other investment opportunities. As interest rates decrease, the gold price
may increase again because there is a lower opportunity cost to holding gold when compared
to other investments. Low interest rates tend to equate with a greater attraction to gold. 3. Inflation
A common reason cited for holding gold is as a hedge against inflation and currency
devaluation. Currency values fluctuate, but gold values, in terms of what an ounce of
gold can buy, has over the long term, maintained its purchasing power. Gold is seen as an attractive
low-risk, solid investment in the midst of floundering currencies. Investors may feel
encouraged to buy gold when they believe the value of their paper money will decline. 4. Global Crisis – Safe Haven Investment
Because gold prices tend to rise when people lack confidence in governments or financial
markets, it is often called a crisis commodity. World events have an impact on the price of
gold because gold is viewed as a source of safety amid economic or geopolitical turmoil.
For example, the price of gold spiked after the Russians moved into the Ukraine as people
became uncertain about geopolitical stability in the region. It also rose when there was
a serious possibility of Greece’s exit from the Eurozone. More lately it has risen since
the beginning of this year as a result of major stock market falls around the world.
In a nutshell, political and economic chaos equates to more interest in gold as a safe
haven. Despite a weak first half to 2015, physical coin and bar demand by private investors
actually rose in 2015 compared with 2014 from 1000 tonnes to 1011 tonnes. 5. Quantitative Easing
Quantitative easing, or QE, at its most simple, refers to a central bank strategy of buying
securities in order to increase the money supply. By flooding financial institutions
with money, a central bank, like the Federal Reserve, hopes to encourage banks to loan
more money and increase its supply and engineer economic recovery. Other central banks that
have employed this strategy include the Bank of England, the Bank of Japan, and the European
Central Bank, as we have remarked upon in previous videos.
A larger money supply pushes interest rates down, which could encourage investors to buy
gold because of the lower opportunity cost. When overdone, this tactic can trigger inflation,
and some fear hyperinflation, another signal of a rising price of gold. The Fed actually
announced that they had stopped QE on October 29th of 2014, and this put further downward
pressure on gold prices as it was believed that the next move was a rise in interest
rates 6. Central Bank Instability
Most countries have Central Banks and in the US, it’s the Federal Reserve, in Europe
the European Central Bank, you also have the Bank of Japan, the Swiss National Bank, the
Peoples Bank of China etc etc. Bank failures and bail ins, and irregular economic policies
make buying gold seem like a safe haven investment. Once again, people flock to gold when the
current paper money system experiences uncertainty. Some investors prefer the physical and tangible
security of holding gold when central banks are going through deficits as a protection
of wealth. This increase in demand drives up the value and price of gold even further 7. Government Reserves/Holdings
Central banks, like the U.S. Federal Reserve, hold both gold and paper currency in and as
reserves. In fact, the United States and several European countries hold the bulk of their
reserves in gold, and they have been buying more gold for these reserves recently. When
these central banks start to buy gold in greater quantities than they sell, it drives gold
prices up. This is because the supply of currency increases and available gold becomes scarcer.
The World Gold Council recently announced that central banks purchased some extra 33
tonnes of Gold in the fourth quarter of last year compared to the same period the previous
year. 8. Jewellery and Industry
Gold is not just valuable as a hedge and a safe haven investment; gold is also used in
jewellery and industry. Around 60% of gold demand is for jewellery. In fact China and
India accounted for approximately 50% of total gold demand last year. In some parts of India,
gold is still regarded as a type of currency, a display of wealth, an important gift, and
a hedge against bad times. In China, gold is a symbol of opulence and
a booming Chinese economy has meant that people have had more money to spend on it, and in
fact, this has been encouraged by the Chinese Government.
Total jewellery demand for 2015 was 2455 tonnes and demand for industrial uses stood at 330
tonnes – both slightly down on the previous year. 9. Gold Production
It is estimated that above ground stocks of gold stand at 183,600 tonnes. Mine supply
for 2015 stood at 3,165 tonnes marginally down on 2014.
Even though new production might seem modest compared to the total supply, production costs
can influence the price of gold throughout the world. When production costs rise, miners
attempt to sell gold at higher prices to preserve and protect profits.
We have also seen of late when shortages have occurred, premiums on gold coins and bars
rise quite considerably. 10. Speculation
We have often heard that investors purchase gold as a hedge and others claim it is purchased
as a speculative investment; let’s look at a brief definition of each of these:
The dictionary meaning of “hedge” is • to protect against risks from price fluctuations
The dictionary meaning of “Speculate” is • to assume a business risk in hope of gain,
especially to buy or sell in expectation of profiting from market fluctuations.
Well without going into the advantages and disadvantages or the moralities of each, it
is a well-known fact that the amount of paper gold traded vastly exceeds the amount of physical
gold that exists. According to Nick Laird of Sharelynx, the notional value of paper
gold traded in a day at current prices is around $125 billion or 3248 tonnes – more
than the annual physical supply. Clearly this has a bearing on and impacts the underlying
gold price. 11. Supply vs. Demand Total demand in 2015 weighed in at 4,212.2
tonnes, compared with 4,226.4 tonnes the previous year, according to the World Gold Council.
However, gold demand growth rose toward the end of the year– fourth-quarter demand was
1,117.7 tons, up 4% from the same period a year earlier. Total Gold supply fell 4% to
4,258.3 tonnes but still marginally outstripped demand for the year.
Gold has been mined and coveting for at least 5,000 years, and this precious metal is likely
to remain precious even if its price fluctuates often. If you plan to buy gold, you need to
understand that the price is impacted by production costs, money supply, comfort or discomfort
with financial or geopolitical stability, the demand generated by jewellery and industry,
and actions taken by central banks. In other words, gold is a finite resource and when
global economic conditions make gold more attractive, gold demand increases, making
the price of gold rise. But the actual value of gold remains fairly stable in the long
run, that means it maintains purchasing power and the current price could simply reflect
temporary uncertainty or simple currency fluctuations. So these are the main factors we consider
when looking at our forecasts for the gold price in years to come. Of course we go into
much more depth and analysis with each of these factors, but they briefly highlight
some of the main considerations we contend with. In addition we look at other commodities
and price comparisons and the political agendas of future Prime Ministers, Presidents and
Kings. Please tune into our next video of this series
which will be released on Friday. 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 and look at our Facebook page which is updated
daily at 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
its owners.


  1. 1. Central banks buy Gold and give the peeps paper money to use.2. The Chinese government tells it's people to buy Gold…and our government leaders here in the U.S tells it's people to go shopping and buy shoes to help the economy. In the long run who will be better off? You guys can ponder on that one. Excellent video,thank you.

  2. 1980- $54 ish 2011- $49 ish, 2042- $43 ish. Still worth the wait, you will not see interest rate rises before then. UK readers who buy silver, VAT free silver delivered to your door cheaper than anyone else I can find. Let me know if you can find cheaper in the UK. If Silver falls below $9 I think it will be hard to buy it. May be wrong. Keep the good videos up.

  3. Nice bullet points. Can't wait for the silver video on Friday. According to the internet rumor mill, Friday is the BIG DAY. The COLLAPSE. Each new scare produces less enthusiasm in me. Now I'm like, ho hum, TEOTWAWKI again.

  4. Under point 9, you might have added that production costs are strongly influenced by the price of oil, because mining is energy intensive. Historically, the oil/gold ratio has traded within a fairly narrow range, though that no longer holds now.

  5. How about $1300+ gold by end Feb and $65+ silver by end May? It's all guess work really isn't it? By the way, that's an interesting Biblical (visual) reference. There's more to it than meets the eye, methinks.

  6. I find more people seem to think on buying gold or silver as an investment. not to preserve their wealth. WoW! only fools by gold and silver thinking they are going to make a big profit.

  7. No ones knows the future…

    But more and more people feel something is not okay,people complain about the great news that bombarding us in the media but in real life things are not like the news tells the people…

  8. Yet another hurdle to consider is the likelihood of miners to trip over each other hoping to sell their production forward once gold reaches a certain price level… speaking of hedging. For now, the smart money is keeping an eye on it to see where gold lands after a technically significant parabolic move.

  9. I first and formost do not believe that the USA has the gold it claims to have. We see some banks who are not in the direct orbit of the Fed, are not trusting in the long term viability of the US dollar and turning to gold. This trend will last at least in the short term. We see more and more countries doing side deals outside the dollar, the latest be a Brazil/Iran agreement to deal in Euros. These facts and many more point to a bright future for gold and as for the nay sayers, holding gold physically in your hands is for people who have a long term horizon view of their purchase.

  10. Considering all of the factors that you listes which affect gold prices as well as the recent strength in gold price is there any explanation why Goldman Sachs just a few days ago recommended shorting gold? That seems an odd call given what is going on in the markets right now. Seems like the time to short was a few years ago. And there are other better choices for a short position. Any chance they want the price of gold to fall so people don't rush to buy it because that would signal lack of confidence in the currency and the banks ?

  11. Hello gentlemen: I agree with most of your analysis. I will add that a very strong early warning indicator is showing from the mining complex that this indeed is the beginning of a trending move higher for both gold and silver. We want to see the declining broken trend line for gold circa $1,180-90 hold on any weakness, and likewise the declining broken trend line around $14.50 for silver. The volume in the mining sector is 500% what it was at the highs a few years ago, and significant trend lines have been broken, indicating a major new wave of accumulation is happening. I do not expect prices to skyrocket this year, but we are looking at the start of a multi-year advance. Cheers and thanks.

  12. QE has been around for years now, and this limp, flaccid economy is still on life support. The fed has rotted things from the inside. How come precious metals haven't gone vertical?

  13. Inflation: An expansion in the currency supply
    deflation: a subtraction in the currency supply
    hyperinflation: A general lose of confidence in the currency =>
    the currency becomes something to get rid of asap rather then to accumulate.

    This makes hyperinflation quite different from normal inflation, as inflation comes from central bank manipulation, while hyperinflation comes from the public getting wise of that fact.

  14. thank you very much gentlemen. well done.
    the root of the problem is fractional lending. that itself devalues the stock market. the debt market. The bonds market. and the commodities market. I believe that it really is at the core of these problems. it shall be corrected. that means that it should. And that it will.

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