Trend Forecast

Rising US interest rates will push gold prices lower as the dollar strengthens. However, as a myriad of destabilizing geo-economic and geopolitical tensions increase, and considering the high levels of uncertainty with the Trump White House, we maintain our forecast of a $150 downside risk and a strong upside potential once gold solidly breaks $1,400 per ounce.

While gold outshines all the world’s currencies and commodities as the ultimate safe-haven asset in times of deep concern and high anxiety, in the absence of government interference and/or controls, we forecast increasing demand and strong price support for bitcoin as well.

On equity-market fronts and the American economy in particular, we and many others expect a sharp Trump rally market correction. But absent a wild-card event, be it political, economic or military, such as a terror strike, false flag or real, the US economy will moderately grow and the stock market will recover. Further, should Trump’s economic plans materialize as promoted, the Gross Domestic Product, which has tracked the worst post-recessionary growth since the end of World War II, will expand at a higher rate.

On the global front, as stated, Europe’s economic future is closely tied to upcoming elections, particularly in France. Absent a Le Pen victory there or other populist upsets in Germany, Netherlands and/or Italy that will threaten the euro and European Union’s future, the EU’s GDP will continue to slog along at current rates.
While China risks a growing debt bubble and currency pressures, considering positive recent import/export data, Beijing will continue monetary and fiscal measures to sustain steady economic growth.

And, despite risks of Middle East wars, an escalation of the Ukraine civil war and India still in flux following the massive currency recall last November, global economic growth, while moderate, will be stronger than in recent years.

Therefore, from Africa to South America and Russia to Australia, while risks persist, the prospects for economic and equity-market growth — at this time, in the absence of wildcard events — are much stronger than prospects for contraction.