Presidential election year politics will disrupt markets, leading to a strong year for physical gold and rare coins in 2016, and a drop in the Dow Jones stock market average, predicts Michael Fuljenz, an award-winning precious metals and numismatic writer and President of Universal Coin & Bullion in Beaumont, Texas (www.UniversalCoin.com).
“Nothing is guaranteed and almost anything can happen, of course, but I predict that new supplies of gold will decline from last year’s levels due to the cost of mining versus the price gold. However, the public’s demand for physical gold, such as American Eagle and Canadian Maple Leaf gold coins, will rise even higher from 2015’s impressive levels,” Fuljenz stated.
He predicts gold could rise to $1,200 or as high as $1,300 in 2016 depending on the strength of the U.S. dollar compared to other global currencies and the continued strong purchasing of gold by central banks.
Fuljenz emphasizes the long term strength of gold, noting that at the end of 2015, gold was about 270 percent higher than it was in 2000 while the Dow Jones average was only about 50 percent higher. Compared to 2005, gold was about 140 percent higher and the Dow average was up by about 75 percent.
In his latest weekly, free Metals Market Report, he makes seven “Fearless Forecast” predictions.
1) New gold supplies will likely decline from 2015 to 2016. This past year was likely the “peak year” of global mining production. Lower supplies and/or rising demand will lead to higher prices in 2016.
2 )The tensions in the Middle East, particularly in Syria and Iraq (vs. ISIS) will escalate. This will push gold prices higher in “spurts” at first, and then more consistently as seemingly isolated terrorist acts take place around the world.
3) Physical demand for gold will rise from 2015’s record levels, pushing gold higher. The United States Mint, the Royal Canadian Mint and other global suppliers of gold bullion and gold coins will once again run short from time to time, rationing coins to dealers or delaying delivery, perhaps pushing premiums up.
4) The dollar will peak by mid-2016 and then decline toward the end of the year, in terms of other major currencies , such as the euro, the pound and the yen, pushing gold up in terms of the dollar. The Fed will likely not raise rates more than once in 2016, due to the deteriorating U.S. economy and the threat of deflation.
5) Rare coins will likely outpace gold bullion in 2016.
6) Politics will disrupt markets, leading to a strong year for gold and rare coins, and a drop in the Dow Jones average.
7) Wall Street will turn favorable toward gold.
