Categories: General Market Commentary / Precious Metals
Topics: General Market Commentary / General Precious Metals

Investment Banks Suddenly Bullish On Gold by Jason Simpkins

Oct. 18, 2016

Investment Banks Suddenly Bullish On Gold

Investment banks are suddenly bullish on gold.

It's about time.

For the past couple of years, and even the past month, gold has been been bludgeoned by the Fed.

More precisely, it's been bludgeoned by fears that the Fed would raise rates higher.

But now, more and more analysts are coming to realize that the Fed can't really do that — not in any meaningful way. The U.S. economy is simply too weak. Furthermore, every other major economy in the world is going in the opposite direction.

England, Japan, China, Australia... you name it. They're all cutting rates, in some cases into negative territory. And they're quantitative easing, buying their own bonds.

The Bank of England has cut borrowing costs, boosted its QE, and doled out an extra £100 billion ($131 billion) to encourage banks to lend.

The Bank of Japan has pledged to nearly double its purchases of equity-traded funds, from 3.3 trillion yen ($33 billion) to 6 trillion yen ($60 billion).

Australia has cut its benchmark interest rate to a record-low 1.5%, citing the Australian dollar's recent strength against the pound, euro, and yen. South Korea and China are in the same boat, with the latter announcing a huge devaluation to the yuan, which it'd previously been trying to stabilize.

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