CNBC With A Positive “Get Into Gold Now! Prices Could Hit $1,900” Headline? – Eric Dubin
TheNewsDoctors.com
Thu, May 26th, 2016
CNBC with positive coverage on gold? Believe it or not, it happens from time to time – well, at least on their website, somewhat sheltered from tender television viewers and testy financial service industry sponsors.
CNBC’s “Futures Now” interviewed the Lindsey Group’s chief market analyst Peter Boockvar on Tuesday. Boockvar is an outstanding global macro analyst, with a decidedly contrarian perspective.
CNBC reports:
“In order to be bearish on gold, you have to believe that the Fed is going to embark on 100 to 200 basis points of hikes over the next couple of years, which I think is completely unrealistic,” added Boockvar. “This is an ideal opportunity for those who have not gotten in.”
Citing the relative-strength index, Boockvar said that gold is the most oversold it has been since mid-December. He also added that global interest rates have given trillions of dollars’ worth of sovereign bonds negative yield. Coupled with rising Fed rates, this development would theoretically provide gold investors with positive carry on gold. The precious metal is in the midst of its longest losing streak since November 2015.
For additional context, Boockvar highlighted the mid-2000s, when the Fed raised the Federal funds rate from 1 percent to 5 percent. During that time, gold went from $400 to $700. The analyst also cited the start of 2016, when Bank of Japan Governor Haruhiko Kuroda adopted negative interest rates. However, the move failed to help the nation achieve stability in its currency.
“The market acted in contradiction to what he expected,” said Boockvar of Kuroda. “This was the beginning of the end of central banks’ influence on markets. That’s one thing that was a major factor in the gold bear market that began in 2011: an infatuation of faith in central banks, notably the Fed.”
“The growing likelihood of another rate hike should be a glaring technical sign to any tape-watcher,” reasoned Boockvar in his coverage. “I don’t believe the dollar breaks out higher on another rate hike, and I therefore remain bullish on gold and silver and other commodities.”
The Rest…HERE
