‘Silver may take the gold’: Bloomberg Intelligence is looking at $50 silver price
Silver’s bull market is just beginning, said Bloomberg Intelligence, which sees silver as the “primary metal” benefitting from electrification and quantitative easing next year.
The precious metal will follow in gold’s footsteps towards its own record high, said Bloomberg Intelligence senior commodity strategist Mike McGlone.
“Silver may be a primary metal at the forefront of favorable trends in electrification and quantitative easing, with technicals pointing to a nascent bull market, in our view,” McGlone wrote on Monday. “Uniquely precious and increasingly industrial, probabilities lean toward the metal — known as leveraged gold — following its yellow peer to new highs.”
New record highs for the silver market would be a breach of the $50 an ounce level. A move like that would double silver’s current trading levels. At the time of writing, March Comex silver was trading at $25.37, down 3.83% on the day.
Bloomberg Intelligence compares silver’s price potential to that of 2008, which saw the start of a rally that took the metal to nearly $50.
“Annual technical indicators for silver are akin to those during turns higher at the start of the new millennium and following 2008. We see the metal following a similar trajectory as the aftermath of the financial crisis toward $50 an ounce, but with greater potential for staying power on a path paved by gold,” McGlone said.
CNN Business/Julia Horowitz
$900 billion in stimulus is coming. More is needed but isn’t guaranteed
After months and months of delay, Congress has passed a $900 billion stimulus package that promises to accelerate vaccine distribution and deliver much-needed aid to small businesses and Americans who have been struggling to get by.
What’s happening: The White House has said that President Donald Trump will sign the legislation once it reaches his desk, clearing the way for the bill to quickly become law.
Key provisions include:
Direct payments of up to $600 per adult and child
Enhanced jobless benefits of $300 per week
Assistance for small businesses, including $284 billion for forgivable Paycheck Protection Programs loans and $15 billion for live venues, independent movie theaters and cultural institutions
$25 billion for rental assistance and an eviction moratorium extension
$45 billion to support transportation services, including airports, Amtrak and airline employees
It’s the second-largest federal stimulus package ever, behind only the $2 trillion CARES Act that Congress approved in March. But some are already warning it won’t be sufficient. The final deal did not include aid for state or local governments, a priority for Democrats, or protections for businesses against coronavirus lawsuits, a Republican aim.
Pandemic unemployment benefits are set to run out for millions by the middle of March.
“The package is a fraction of what is required to address the monumental economic damage caused by [the] inadequate response to the Covid-19 pandemic,” Thea Lee, president of the progressive Economic Policy Institute, said in a statement. She added that it would take roughly $3 trillion to “stop the economic bleeding … and build a strong recovery.”
Fox Business/Associated Press
During crucial holiday season, US consumer confidence slumps
A closely-watched gauge of U.S. consumer confidence tumbled in December as rising coronavirus cases dragged American optimism to its lowest level since the summer.
Rising pessimism is now spreading during the crucial holiday season, which could make or break a number of retailers, airlines, restaurants and other sectors that have been hammered financially during the pandemic.
The December reading of 88.6 released Tuesday by the Conference Board is a sharp decline from last month, which was revised downward to 92.9, and it is far worse than economists had expected.
It may be an ominous sign for an economy in which consumer spending accounts for 70% of all economic activity.
The Commerce Department reported last week that U.S. retail sales fell a seasonally adjusted 1.1% in November, the biggest drop in seven months, and also worse than most were expecting. The drumbeat of weak economic data may be providing a grim preview of Christmas receipts, which can account for a quarter or more of a retailer’s annual sales.
Gold gains as weaker dollar offsets U.S stimulus doubts
Gold prices ticked higher on Wednesday as weakness in the dollar offset worries about a U.S. stimulus deal after President Donald Trump threatened not to sign the pandemic relief bill.
Spot gold rose 0.3% to $1,865.01 per ounce by 0333 GMT, while U.S. gold futures were steady at $1,869.80.
The U.S. dollar edged down 0.1% against a basket of currencies, increasing gold’s appeal among holders of other units.
Since the market has priced in a lot of pandemic-related uncertainty and the U.S. fiscal stimulus deal, gold will likely tread water in the coming weeks and any potential upside will come from new unknown uncertainties, said Michael Langford, director at corporate advisory AirGuide.
“The next move for fund managers is probably to de-risk … I think we’ll see greater flows towards gold exchange-traded funds as they take some risk off the table,” Langford said.
Raising concerns over a global economic recovery, a fast-spreading new coronavirus strain found in Britain has forced several countries around the world to shut their borders to the United Kingdom and drugmakers to scramble to test their COVID-19 vaccines against it.
Gold has climbed 22.9% so far this year on the back of large stimulus measures to aid pandemic-ravaged economies, as it is seen as a hedge against inflation likely to result from such stimulus and benefits from low-interest rates that reduce its opportunity cost.