We mentioned in the news yesterday where Australia may differ in Bank of America’s global predictions of property (together with gold) being the best investments going forward. This was reinforced yesterday in the shock move by Westpac to raise interest rates on owner occupier home loans, with them and others having already done so for investment properties. This prompted Fairfax business columnist Elizabeth Knight to state: “History will show that if there was a day that marked the start of the end of Australia's residential property boom, it was today.” She certainly wasn’t alone with such sentiment and it also prompted Goldman Sachs to say it now sees a rate cut by the RBA in November as “highly likely” and most likely more again in 2016. The other big banks are widely tipped to follow Westpac’s lead as well. Whilst principally blamed on bolstering capital reserves ahead of any market shock, many believe we are also seeing a realisation by the banks that they have over exposed themselves to a property bubble born of ultra low interest rates which would only be worsened with another rate cut. When interest rates eventually climb there could be carnage in the property market as loans become unserviceable, particularly in light of low expectations of wage growth and job security going forward in Australia’s fragile post mining boom economy. This fragility was further reinforced yesterday with more terrible economic data out of China. This move could well be the banks getting ready and trying to limit the extent of that carnage now. Of course another rate cut in November should also see a drop in the Aussie dollar which is always good news for Aussie precious metals holders. The AUD is caught in an interesting dynamic right now where it dipped on the China news yesterday but rose last night on further weakening of the USD. The latter however is due to the now very apparent weakness in the supposed economic saviour of the world.
Here is a more straight forward and non-bullion seller's viewpoint on gold. Stacker's probably wouldn't be interested. http://finance.yahoo.com/news/gold-silver-set-more-pain-145046833.html ( a snip) " LONDON (Reuters) - Gold prices are expected to post another year of losses in 2016, with more pain still in store for the precious metal this year after a weak third quarter, a Reuters poll showed on Thursday. The survey of 38 analysts and traders conducted over the last two weeks returned an average gold price (XAG=) forecast for next year of $1,153 an ounce, 8 percent below the forecast returned by a similar poll in July. This year gold is expected to average $1,165.50 an ounce, down from a forecast last quarter of $1,193 an ounce. In the year to date gold has averaged $1,177 an ounce, but it is expected to slip to $1,125 an ounce in the last quarter. "The chief drivers for a continued abysmal performance in the gold price are mainly twofold - Fed rate hike expectations and disappointing global physical as well as investment demand," GFMS analyst Johann Wiebe said. "We expect the gold price to remain under pressure and record a new low before year-end." ( snip) more in article. Sure, black swans can happen, but some puts on gold might really pay off by Christmas time. I wouldn't buy more physical myself, but then I don't need "strong hands" philosophy. Sell High! Buy Low!
I do not trade paper silver so no selling for me with that. Physical Silver, the Trade Price has not gone up so much that it would make any cents for me to sell. Fact is PM's will go down this year and as long as I see a heavy downtrend as we have for the last 3 years I wait and buy Physical PM's slowly till I see the Flat Line then it will be time to build PM Houses. This little Piggy wants the Shiny house. So huff and puff but sorry I have Strong Hands and for all the right reasons as of now. Silver goes to $30 plus ok I will leave some soap on my hand and off some Silver, that is not going to happen anytime with in the next 10 years. Why we are in a downtrend folks and its a buyers market just do not be early to spend. Work your average do not let your average work you.
