Article by Frank Holmes (US Investors)

It’s been a stellar six months for gold investors. The yellow metal has surged 28 percent year-to-date, its best first half of the year since 1974. And now there are signs that the rally is just getting started.

That’s the assessment of analysts from UBS and Credit Suisse, who see gold entering a new bull run. According to UBS analyst Joni Teves, gold could climb to $1,400 an ounce in the short term on macroeconomic uncertainty, dovish monetary policy and lower yields.

“These factors,” Teves writes, “justify strategic gold allocations across different types of investors” and should encourage hesitant investors to participate.

Already-low bond yields around the globe have fallen even further in Brexit’s wake, many of them hitting fresh all-time lows, including yields in the U.S., U.K., Germany, France, Australia, Japan and elsewhere. For the first time ever, Switzerland’s entire stock of bond yields has fallen below zero, with the 50-year yield plunging to negative 0.03 percent on July 5.

Canada’s 30-year bond yield also plunged to a record low, as did yields on the 10-year and 30-year Treasuries.

About $10 trillion worth of global government debt now carry historically low or negative yields, which are “creating negative growth” in the world economy, according to billionaire “bond king” Bill Gross in his recent Investment Outlook.

Anemic yields are also contributing to gold’s attractiveness right now. Since Britain’s June 23 referendum, the precious metal has rallied more than 8 percent, helping it achieve its best first half of the year in more than a generation.

Negative Real Rates Fuel Prices

Joining UBS in forecasting further gains is Credit Suisse, which sees gold reaching $1,500 by as early as the start of next year. As Kitco reports, Credit Suisse analyst Michael Slifirski writes that “the surprise Brexit vote has solidified and intensified macro and political uncertainty and extended the time frame for a negative real rate environment in the U.S. and potentially abroad.”

This is precisely what I told BNN’s Paul Bagnell this week, using Canada as an example. The Canadian 10-year yield is sitting just below 1 percent, while inflation in May came in at 1.5 percent. When we subtract the latter from the former, we get areal rate of negative 0.5 percent—meaning inflation is eating your lunch. Like negative bond yields, negative real rates have in the past accelerated momentum in gold’s Fear Trade.

We need only look at the end of the last upcycle in gold to see this to be the case. When gold hit its all-time high of $1,900 in August 2011, real interest rates were around 3 percent. A five-year Treasury bond yielded only 0.9 percent, and that’s before inflation took 3.8 percent. But as real rates rose, gold prices fell. Now the reverse is happening.

Gold Miners Rally

The appreciation in bullion is helping to push up gold mining stocks. The FTSE Gold Mines Index, which tracks seniors such as Barrick Gold, Newmont Mining and Goldcorp, is up a phenomenal 125 percent year-to-date.

Our own Gold and Precious Metals Fund (USERX) and World Precious Minerals Fund (UNWPX) are both performing exceptionally well, with USERX returning close to 80 percent for the one-year period and UNWPX surging nearly 100 percent during the same period.

Full Article : Gold is just getting warmed up – UBS analyst 

Historically the summer months have been known as the summer doldrums when it comes to gold, silver and the markets in general. Traders and other Wall street types are off on vacation and trading volumes seem to fall into a slump. However this year there could be some issues that just might allow gold and mining shares rally a bit.

Aside from an economy that is falling apart in North America, along with twindling retail sales and lots of unemployment, the Brexit issue is something to contend with. For those who are not sure what Brexit is, well it’s like a referendum and vote to to see if Britain stays in the EU. If they vote and decide to leave the EU it could spell bad things for the Euro and Europe in general along with uncertainty in currency markets. We all know how Wall Street and bankers like uncertainty. LOL

So from what I read is that if Britian does decide to split from the EU and the currency markets roll over and everyone is running for the exits and looking for safe haven investments, then I think gold will really shine. And I’m not alone on this thought either. George Soros the billionaire is loading up on gold as well as other big fund managers. Some of the biggest hedge funds on Wall Street are buying gold so they know that there very well could be a situation where the “SHTF” and they are wanting to protect their wealth and of course increase it also by making some good profits. If all this should happen later this month and Britian decides to split, then July could very well be an excitiing month for gold and gold mining stocks in general. In fact after seeing gold sell off all last month’s gains, the $30 pop last week could very well be a sign of things to come. Getting caught short on a $30 pop is going to hurt and I think tis is a reason why gold is right back up to where is was before geting sold off last month.

Another thing to look at and concider is the new gold exchange that has opened in Shanghi China. This gold exchange is a phyisical gold exchange. Not a paper gold exchange like the Comex is. Recent articles point to the fact that the Comex has about 140 ounces of paper gold trading for every 1 ounce of physical gold in storage. If everyone who has a piece of paper stating they own X amount of gold and decide to take delivery of that gold, the Comex could very well default. That goes for the silver market as well.

Speaking of silver, there seems to be a lot of jabber on various sites about a silver short squeeze coming soon. There seems to be tons of reasons why but I heard all this before. It seems we have been reading about a triple digit silver for the last 5 years and my theory is this, let’s see if we can get silver back to $20 first before trying to explain why silver will be $100 plus. That’s my take on it. Like wise with gold, let’s see if gold can get back to the old high of $1900 before trying to reason or explain why it is going to go to $5000 or higher.

Either way, all this make for interesting reading and pondering and wishing especially if you are a gold bug. So for the first time in a long time, this could be a summer of a rally instead of the summer of doldrums. For those who follow junior mining plays this will be good to see some stocks rally too.

full article: Summer Doldrums Or Summer Rally