The recent surge in the price of gold suggests the possibility of a 13 percent gain from today’s levels to $1,400 an ounce by April – at which point people should start dumping the metal.
Harry S. Dent Jr., an economic who publishes an investing newsletter, provided that recommendation in a February 24 report to investors
“The strength of the first wave up from $1,050 to $1,255 suggests a higher target than I’d originally eyed, more like $1,400 instead of $1,300, likely into around early April,” he writes. “If this occurs, it will be the last chance to sell gold and silver at more reasonable prices. I still expect gold to fall to as low as $700 by early to mid-2017.”
Gold has risen 18 percent
year-to-date as central banks worldwide have cut interest rates or hinted at monetary stimulus programs. The Federal Reserve, which raised rates in December for the first time in nine years, is expected to minimize the number of additional hikes until inflation rises to about 2 percent.
The consumer price index rose 1.3 percent in January from a year earlier, but futures markets indicate that investors
expect inflation to remain below 2 percent for years to come. Commodities such as oil and industrial metals have collapsed in the past two years as the global economy has weakened.
Dent this month said
the U.S. economy is showing signs of already being in recession as payroll data trend downward.
Dent says stocks may climb for another month before reversing to three-year lows. The S&P 500 has fallen about 7 percent this year to 1,909 as oil prices dropped to 13-year lows and investors worried about China’s weakening economy.
“The S&P 500 could rally to anywhere between 1,975 and 2,040,” Dent says. “Then we could see stocks take the most dramatic fall yet between late March and early July or so, down to 1,600 or lower. If stocks were to instead break back down decisively below 1,810, that would suggest this next down cycle is already occurring.”
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