Gold continues to drift sideways. LBMA consensus sees $23 silver in 2020.

(USAGOLD – 10/18/2019) – Gold continued to drift sideways this morning with not much in the way of news to move it one direction or the other.  It is trading at $1493 and level on the day after falling to the $1486 level overnight. Silver is up 5¢ at $17.60 after falling to near $17.40 in overseas trading. The LBMA (London Bullion Market Association) wrapped up its annual meeting in Shenzen, China earlier this week and released its annual consensus forecast on precious metals prices for the upcoming year.  Last year, the average prediction from the industry’s biggest players (banks, refiners, traders, miners, etc.) was pretty much on the money, so this year’s estimates will likely be weighed with a greater degree of interest than usual.

–– For gold, the membership predicts $1658 on the average – a more than 11% gain from current pricing should it materialize.

–– For silver, the predicted outcome is even better – $23 or 31% over current pricing. That would put the gold-silver ratio at 72 to one – down considerably from the current ratio of 85 to one.

Let’s hope that the LBMA proves itself to be as accurate in 2020 as it was in 2019.

Quote of the Day
“Why does the cycle move as it does? What causes these periodic alternations, this ebb and this flow, in the national priorities? If it is a genuine cycle, the explanation must be primarily internal. Each phase must flow out of the conditions – and contradictions – of the phase before and then itself prepare the way for the next recurrence. A true cycle is self-generating. It cannot be determined, short of catastrophe, by external events. Wars, depressions, inflations may heighten or complicate moods, but the cycle itself rolls on, self-contained, self-sufficient and autonomous. . .The roots of cyclical self sufficiency lies deep in the natural life of humanity. There is a cyclical pattern in organic nature — in the tides, in the seasons, in night and day, in the systole and diastole of the human heart.” – Arthur M. Schlesinger, Jr., The Cycles of American History

Chart of the Day

Overlay chart of U.S. federal government expenditures and tax receipts showing widening gap

Chart note:  This chart shows U.S. government receipts and expenditures from 1950 to present.  Note the growing gap between incoming and outgoing – the difference for the most part filled by additions to the national debt.  Given the established trend, that gap in all likelihood would have continued widening without the imposition of the new tax reduction program and simultaneous growth in government spending.  With tax reductions now in place, the distance between the two lines is likely to widen even further.

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