May
the 4th be with you. And especially with the precious metals bulls, as
the month has gotten off to a pretty rough start for gold.
The pressure on the shiny stuff is not letting up.
The
dollar got a lift from that Fed statement — gold and the dollar tend to
move in opposite directions. Meanwhile, a perceived win by French
presidential front-runner Emmanuel Macron in Wednesday evening’s TV
debate dulled at least one argument for keeping safe-haven gold in your
pocket.
There’s plenty of talk out there about big levels to watch as gold snakes its way down, or up, depending on how the day goes.
On to our call of the day
from Goldman Sachs, which has picked an opportune time to weigh in on
gold. According to strategist Jeffrey Currie and the team, investors
hoping for a short-term pop for gold are likely to be disappointed, but
that doesn’t mean there won’t be buying opportunities.
“The
main catalysts for further very near term downside in gold, in our
view, is a repricing of U.S. rate increases (higher) and a QE reduction
(faster), on the back of an increased expectation of U.S. tax reform or
infrastructure delivery (cuts) or solid U.S. and global economic
growth,” they say in a note to clients.
The Goldman team expects a “moderately lower” shift for gold in the next three months, down to $1,200 an ounce.
In
the very near term — as in on Friday — they see payrolls rising by
200,000, versus the market consensus of 185,000. Strong U.S. jobs
numbers will send the Fed a message that the economy can withstand more
interest rate increases, which Goldman is pricing in for June and
September. Rising real interest rates weigh on gold because the metal
provides no yield. Plus, the dollar tends to move higher, sending prices
for the precious stuff in the opposite direction.
Still, Goldman is on the lookout for bargain gold prices and ready to pounce should the selloff keep uglying up.
“Over
the medium term, we would see any significant further pullback in gold
as a buying opportunity as our 12-month target remains $1,250 an ounce,”
the analysts say.
Why do they like gold in the
medium-to-longer term? Weak supply growth from the industry and high
valuations in other asset classes that fight for investor money, such as
the S&P 500 — Goldman’s year-end target is 2,300 based on valuation
concerns.
Now, check out what why this precious-metals
retailer thinks all the uncertainty swimming around the world right now
is just one big green flag to buy gold and silver.
As
earnings season winds down, it’s looking like a fairly rosy quarter.
Here’s a chart that lays out how things are improving from Charles
Schwab’s chief investment strategist Liz Ann Sonders:
$1,200
— That’s the most expensive iPhone 7 in the world currently, according
to Deutsche Bank’s annual survey of global prices, which compiled the
cost of the phone in 33 countries.
That cost to Turkish
shoppers represents a 147% markup relative to the U.S., which is still
the cheapest place to pick an iPhone up, with a tag of $815.
The quote
“We’re
gonna pass it. We’re gonna pass it. Let’s be optimistic about life!” —
That was a rather triumphant GOP Majority Leader Kevin McCarthy on the health-care bill that goes up for a vote in the House later Thursday.
Meanwhile, #VoteNo is trending on Twitter:
An executive order from POTUS is on the way to expand religious rights
Venezuela’s opposition leader Leopoldo Lopez says he’s alive and well
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