Welcome to illuminati silver, we tell you
the truth about silver. Today is Thursday 6th October 2016 and we
are briefly looking at the argument in favour of UK investors buying gold and silver.
Regular listeners are well aware of our general scepticism towards gold and silver pumpers.
In fact when we began our channel and produced our first video on 16th March 2015 we were
totally convinced that gold and silver prices were not going to move up any time soon and
certainly not to the $5000 – $10,000 an oz level the pumpers were pushing for gold and
the $100 – $400 level they were forecasting for silver. In fact we were right and we rapidly
saw gold decline to as low as $1049 and silver to $13.58. Now today compared to the price
as of 16th March 2015 Gold is up 9% and silver is up 8% having recovered from those lows
as a result of the FED not raising rates more than once despite its promise to do so and
the shock that the UK’s BREXIT vote has had around the world.
In sterling terms for quite a while we were also correct, on 16th March 2015 gold stood
at £780 and then fell to £694 and silver stood at £10.54 and fell to £9.06 but what
has happened since then? Well today with gold standing at £993 it is up some 27% and silver
now standing at £13.91 it is up 32%. So what happened? The answer very simply: “The fear
of BREXIT, then BREXIT and now the fear of the Aftermath of BREXIT”.
How can we support that conclusion? Well we have all seen the news as to what has happened
to Sterling. Even the FT couldn’t resist the headline “Sterling near 31-year low
against dollar as May sets Brexit start date” published just 3 days ago. It then went on
to point out: “Against the dollar, sterling was down 1.2
per cent at $1.2815, within touching distance of the July 6th drop to $1.2796 when the pound
hit its lowest level since 1985. The pound was 0.9 per cent weaker against the euro,
with as much as £0.8737 needed to buy a unit of the single currency, a level not touched
since 2013”. Finally it quoted Charles St Arnaud, Nomura FX strategist who said : “The
decline in sterling is another reminder that the market doesn’t like the uncertainty
that Brexit is bringing, that the negotiations will be hard and that the probability of a
hard Brexit has increased.” It was clear from the Prime Ministers speech
at the Conservative Party Conference this week that a ‘hard BREXIT’ deal was going
to occur. This means the UK standing fast on its total control of immigration which
flouts one of the key pillars of the Single European Market which is Freedom of Movement
of ‘goods, capital and labour’. If Theresa May insists on this, then Britain has to look
elsewhere for its markets especially if the EU remains intransigent. The negative impact
of leaving this arrangement will be considerable as the UK is seen as a gateway to Europe both
geographically and politically. Many important businesses have headquarters in the UK to
allow access to the single market. By seeking to leave the single market Mrs May has triggered
further worries for the future of the UK and this is being reflected in the price of the
pound. This worries traders and foreign exchange
dealers too. Data from the Commodity Futures Trading Commission showed that hedge funds
nearly doubled their net short positions on the UK currency to $5bn in the week to September
27th from the previous week, as bearish sentiment towards sterling re-emerged. That ended four
straight weeks of net buying of the pound. Unicredit today announced that it sees the
risk of the UK coming out of both the EU and Common Market, as not sufficiently ‘priced
in’ by markets, and so, therefore, likely to lead to further weakness for Sterling.
Societe Generale see even more potential upside for the Euro versus the Pound and the Yen,
from a pure yield comparison point of view, since both these currencies are unlikely to
see higher yields. It sees the Pound to Dollar Exchange Rate Going sub -1.25.
Even the bookmaker Betway has slashed sterling odds of falling below $1.20 to the £ and
is giving odds of a 5:1 chance of GBP/USD exchange rate falling into 1.00-1.09 region
again. So what does this mean for UK gold buyers.
Well to us it’s obvious. If sterling is likely to fall by another 10% against the
dollar then it makes sense to buy gold. Now we are already of the opinion that gold has
entered into ‘buy territory’ in US dollar terms, and even if we are wrong about gold
prices but right about sterling; gold would have to fall another 10% in price which would
take it to around $1140 territory for investors not be better off. Now of course we could
be wrong on both accounts, but even the IMF has slashed the UK’s growth rate by 50%
for 2017 and if they are right, and they have more resources to calculate than we do, then
how can sterling strengthen, especially short term, with this level of uncertainty overhanging
it for the next 2 years while we negotiate our way out of the EU?
Yes there is more risk buying gold and silver in sterling bearing in mind its huge rise
already encountered, however if there is to be more sterling pain on the horizon one has
to look for currency protection and to us the solution is obvious.
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 illuminatisilver.com
and if you haven’t already done so please subscribe as a free member for regular email
updates and offers. Our Facebook page which is updated daily can be found at 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