It’s
been a battle between the bulls and bears since the beginning of the year.
After the FOMC rate increase in December gold bulls seemed to have
given up the battle but they never forfeit the war. Gold soared to trade above
1298 but investors were unable to secure the $1300
price before prices eased to 1295.20. Silvers climb was miraculous adding
almost 300 points on Friday to trade at 17.85 after hitting a high of 17.98 as
traders continue to push the $18 level.
Gold
Eagle News reported that Gold is up nearly 21% from its December 2015 lows.
Moreover, silver has added an impressive 28% to its price during the same time
frame.
Gold
bottomed in 2001 after a nearly 20-year bear market following the peak in 1980
at $850/oz.
Turning
to the gold to silver ratio, just in the last week as silver broke higher
through our important resistance level near $16.25, we note an important trend
change in the ratio between the two precious metals.
Since
the precious metals peak in 2011, as both gold and silver fell, it should be
observed that silver had fallen further than gold on a percentage basis.
Seeking
Alpha said that Nothing can stop gold's ascent, according to many market
commentators, and we wholeheartedly agree. The U.S. dollar doesn't look likely
to strengthen a great deal now until at least the September FOMC meeting,
which
may allow gold to start to make a move on an all-time high. Buying gold or a
quality gold fund right now is a great move in our view, and we expect even
after recent gains to see sizable returns over the next few months.
An
all-time high may seem a little far-fetched and, let's be honest, it has a long
way to go before it will get there.
CRUDE OIL:
Baker
Hughes in its weekly rig count report that the number of oil rigs in the U.S.
came in at 332 for the week. This implies a drop of 11 oil rigs week-over-week and represents
a falloff of 51.1% from the 679 oil rigs seen the same week a year ago.
Sputnik International said that global
oil prices could sink to as low as $30/bbl. once again as oversupply still lingers, the US dollar might
rebound should growth tick up, and energy investors might start cashing out now
that oil has enjoyed a bull market.
After
oil's massive 70% rebound from its 12-year low in January to its current price
of $50/bbl., global oil prices might post steep declines soon, retreating back
to as low as $30/bbl. in the near-to-medium-term.
Recent
developments in the oil market, including a 20% gain in prices in April alone, might resemble a similar pattern
seen in March-June 2015, when crude prices rallied from their multi-year
lows only to crash dramatically in the second half of the year amid concerns of
global oversupply.
The
price of oil has increased by more than 50 % in four months, reported
Bloomberg. The growth is determined by expectations for the recovery of the
balance between supply and demand in the market.
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