Silver to outperform gold, historical ratio suggests

Posted on

Standard Chartered and the Silver Institute both have issued predictions that global silver production is set to shrink in the coming year and beyond.

Now another major bank, Societe Generale, is making the same forecast. It is predicting that supplies of newly mined silver will drop 9.2% this year and 13% in 2017.

This dearth is partly because the output of base metals also has shrunk, and silver is often recovered as a byproduct of mining operations that are primarily seeking zinc, copper, lead, and the like.

Well continue to see mine cutbacks this year and that will play into the hands of silver, Saxo Bank strategist Ole Hansen told Bloomberg. This will give silver its long overdue attention.

High ratio signals crisis: Meanwhile, the gold-silver ratio or the number of ounces of silver needed to buy a single ounce of gold continues to hover around 80, give or take a few notches.

In modern history, the gold/silver ratio has only been this high three other times, all periods of extreme turmoil the 2008 crisis, Gulf War, and World War II, Zero Hedge noted.

Not only does a high ratio signal potential crisis conditions, but its also a bullish signal to buy silver.

As of Monday, the gold-to-silver ratio just fell below 80, and the last three times that happened silver outperformed gold by 60 to 302 percentage points in the next two or three years, Bloomberg reported.

25% jump in annual silver Eagle sales?: Investors who watch this ratio have been piling in. Silver American Eagle bullion coin sales have topped 13 million for the year, despite the U.S. Mint continuing to allocate, or ration, coins to its authorized network of wholesalers.

Silver analyst Steve St. Angelo went so far as to predict that silver Eagle sales will likely jump by 25% in the first quarter due to deteriorating market conditions. There are two weeks remaining in March and the U.S. Mint will likely sell another 2 million.This will put total silver Eagle sales for the first quarter at 15 million the highest ever.

With 47 million silver Eagles sold in 2015s record-breaking year, 2016 could prove to be another, even bigger milestone for the Mint. Now is the time to invest in silver, when the ratio is signaling a potential move higher for poor mans gold.

Charting the Flowing Hair silver dollars dazzling run to $10 million

Posted on

One of the most famous and valuable coins of all time is on a victory tour overseas, and its been drawing large crowds during its various stops in Europe.

The 1794 Flowing Hair silver dollar that sold for a record $10,016,875 in 2013 is on display in London this weekend, after previous stops in cities such as Prague, Warsaw, Stockholm, and Dublin. Joining it on these rounds has been another famous rarity: an original copy of the Declaration of Independence, made in 1776 and valued at about $4 million.

The Flowing Hair coin is believed to be the first U.S. silver dollar ever struck and could potentially have been handled by George Washington himself. Minted on a hand-turned screw press, only about 150 issues of this date are known to exist from the roughly 1,758 minted in Philadelphia. Once part of the Cardinal Collection, this coin has been owned by some illustrious collectors, including Colonel E.H.R Ned Green, W.W. Neil, and Amon Carter Sr. and Jr.

Graded as an impeccable Specimen 66 by PCGS and sporting a green CAC sticker, the coin also is the only such 1794 dollar with a silver plug, inserted to bring it up to a standard weight. Surrounded by 15 stars (one for each state at the time), a Lady Liberty with flowing locks adorns one side, while a bald eagle is depicted on the other.

Despite the fact that the iconic coin is so striking, the BBC asked the question in a March 17 feature: What makes this coin the most valuable in the world? Answer: Rarity, condition and cultural value.

For a visual representation of this coins explosive value, just check out this chart of its gains over a roughly 70-year period, using the sale years and prices listed by the BBC. (The coins whereabouts up until Greens purchase in the 1920s are unknown, although it reportedly was in government storage for much of the 19th century.)

3_18 (1)

As the chart illustrates, this Flowing Hair dollars value has skyrocketed over time, putting to shame gains by stocks, bonds, and even gold bullion. Of course, a coin like this one only comes around once in a super-blue moon. For those with massively deep pockets, the coins current owner reportedly is open to the right offer.

But the right price is likely out of reach for most people. Nonetheless, numerous lesser-tier rare coins can also provide proportionately superstar returns, as well as aesthetic enjoyment, to those with the eye to invest in them. With decades of experience in numismatic collecting and investing, Blanchard and Company is here to help coin enthusiasts achieve the utmost with their rarities.

Gold gets another green light as IMF, Bernanke tout negative interest rates

Posted on

It cant happen here, the saying goes. But when it comes to negative interest rates, the idea that the Federal Reserve wont implement them here in the U.S. appears to be losing ground, judging from two high-profile endorsements of the policy.

Although Fed chief Janet Yellen told the media during her news conference Wednesday that negative rates havent been discussed by U.S. central bankers, in a February statement to Congress she acknowledged, Were taking a look at them again because we would want to be prepared in the event that we needed to add accommodation. I wouldnt take those off the table. But we would have work to do to judge whether they would be workable here.

A good thing, says IMF: And negative rates (NIRP) got a strong endorsement Friday from International Monetary Fund head Christine Lagarde, who said, If we had not had those negative rates, we would be in a much worse place today, with inflation probably lower than where it is, with growth probably lower than where we have it. It was a good thing to actually implement those negative rates under the current circumstances.

Lagarde was seconded Friday in a blog post by Yellens Fed predecessor, Ben Bernanke, writing for the Brookings Institution in a piece titled What tools does the Fed have left? Part 1: Negative interest rates.

Although saying he is skeptical about deeply negative rates in the U.S., he acknowledged that NIRP might be more powerful than thought.

Manageable, says Bernanke: After outlining concerns about NIRPs potentially adverse effects on money-market funds, bank profits, and the overall financial markets, Bernanke concluded that the anxiety about negative interest rates seen recently in the media and in markets seems to me to be overdone and that any repercussions ought to be manageable.

Bernanke then argues that NIRP would be a reasonable compromise between no action and rolling out the big QE gun.

Remember: Bernanke is the person who in 2007 declared that the subprime-housing market was contained just before the fallout helped create the financial crisis, the TARP bailouts, and the Great Recession. If Bernanke says NIRP is manageable, look out.

Cash ban goes hand-in-hand: NIRP endorsements from Lagarde and Bernanke have followed other recent calls to ban high-denomination currency bills, most notably one-time Fed-chief candidate Larry Summers editorial urging the eradication of the $100 note.

Although Yellen just talked down the notion of NIRP, Lagarde and Bernanke are now running interference for her, keeping the idea in the minds of the media and the public.

Why is NIRP important to gold? If low interest rates are bullish for gold, then negative rates are even more potent. HSBC just published a note arguing that NIRPs growing prevalence will boost bullion.

With an increasing number of central banks implementing a negative rates policy, and this reflecting continued economic weakness, we expect gold to be supported by this backdrop, HSBC analyst James Steel wrote. Negative rates are a sign of distress, which may increase flight-to-quality demand for gold. They lower the opportunity cost of owning gold and therefore encourage purchases.

Rally may last longer, says bank: HSBCs note also points out that gold historically has rallied for 100 days after the Fed has started lifting rates, which it did in December. Steel thinks that the latest statement from the Fed that it will only likely hike twice this year will prolong that effect on gold. Given that rate hike expectations continue to be pushed into the future (HSBC economists expect the next hike in June), we expect the rally may last longer than it has historically.

And with the Feds dovish statement Wednesday also pressuring the dollar, sending it into its worst slump since 2011, HSBC thinks the yellow metals 2016 bull run will be sustained. Moreover, the coming of negative rates in the U.S. likely could light a massive fire under the gold price going forward.

Gold gleams as worlds largest reinsurer hits the mattresses against NIRP

Posted on

Golds allure keeps rising thanks to the growing preponderance of negative interest rates worldwide.

Morgan Stanley, which just declared that global recession odds have risen to 30%, has now raised its average gold-price target for the year, by 8% to $1,173, below current spot levels but nevertheless an acknowledgment that the metals run higher this year looks like the real deal.

And now the worlds largest reinsurer is turning to physical assets to shelter itself from the scourge of negative rates, in which central banks charge other institutions storage fees, which are then often passed on to everyday bank depositors.

Munich Re of Germany has announced that its going to the mattresses, so to speak, increasing its gold and cash reserves in the wake of steeper negative rates from the European Central Bank.

Munich Re has held gold in its coffers for some time and recently added a cash sum in the two-digit million euros, Reuters reported, citing CEO Nikolaus von Bomhard.

We are just trying it out, but you can see how serious the situation is, von Bomhard said.

A separate Bloomberg story on the situation specified those cash levels at at least 10 million euros ($11 million) in two currencies.

This is huge news for gold because although its presence has been increasing in central-bank vaults in recent years, it remains vastly underrepresented in the asset allocations of other large-scale investors such as insurers and pension funds, some of which are now being forced to consider the yellow metal thanks to the destructiveness of NIRP, or negative-interest-rate policies. Munich Res latest plunge into self-storing cash and gold could mark a sea change for the precious metals prospects.

Gold blasts $30 higher as Fed ignores early signs of inflation

Posted on

Is it the moment weve all been waiting for? Last week Federal Reserve Vice Chairman Stanley Fischer noted something unusual: We may well at present be seeing the first stirrings of an increase in the inflation rate.

But on Wednesday, the Federal Reserve ignored Fischers comment and kept interest rates on hold, citing global economic and financial developments that continue to pose risks.

Whats more, it reduced its expectations of raising rates four times this year to just two. And despite Fischers take, it also lowered its inflation forecast to 1.2%, down from the 1.6% it predicted in December.

Systemic risks boost gold: The gloomy outlook, which saw the Fed cut its U.S. GDP target to 2.2% from 2.4%, sent gold soaring. After festering near $1,230 ahead of the meeting, the metal jumped about $30 and back above $1,260.

The Fed decision implies that economic growth is weak, Van Eck Associates fund manager Joe Foster told Bloomberg. A weak economy and the inability to have effective monetary policy creates all sorts of financial risks,risks in the banking system, risks to the economy, and those type of systemic risks are what gold rises on.

Key gauges see rising prices: But is the Fed missing the inflation boat? Not only is gold often an early indicator of inflation, but three major price indicators suggest that inflation is starting to take hold and at least inch toward the banks 2% target.

  1. Although the overall Producer Price Index (PPI) declined in February, the core measure that excludes food and energy prices rose 0.9% in the 12 months through February. That was the largest gain since July 2015 and followed a 0.8% increase in January, Reuters noted.
  2. Additionally, the most recent Personal Consumption Expenditure index (PCE), the Feds favored model, posted a core gain of 1.7% over the year.
  3. And the February core Consumer Price Index (CPI) showed a 2.3% advance over the year, its strongest annual gain since 2012, U.S. News & World Report noted.

Trigger for next recession: Even a foreign journalist, Ambrose Evans-Pritchard of Londons Telegraph newspaper, seized on the U.S. inflation picture in an article titled U.S. inflation rears its ugly head as global cycle nears danger zone, calling the nascent signs of inflation the trigger for the next global recession.

The Fed must acknowledge the uptick in the inflation stats in their statement if they truly are dependent on the data, wrote Peter Boockvar at The Lindsey Group.

Win-win for gold: Whatever the Fed does with interest rates this year, some analysts are seeing win-win scenarios for gold. If the Fed does nothing and says, You know what? Were not going to raise the rest of the year, it will crush the dollar and gold will go up higher, Bloomberg metals expert Ken Hoffman told the network before the Wednesday Fed meetings conclusion.

If they come out and say, Hey, were going to raise a bunch of times, the dollar will go a lot higher, yes, but then these goldbugs think thats going to crush the rest of the world. Look at China, who has spent a trillion dollars defending its currency, which it wants to get much weaker. A stronger dollar would put even more pressure on China, and who wants China going into the tank, and that makes people rush to gold, so the goldbugs think they win no matter what. Theyre looking at this as a big buying opportunity.

Hard to control inflation: One danger in the Feds decision to hold rates in place is that it might be misreading the potential for inflation caused by its decade of near-zero rates and massive amounts of quantitative easing. After all, the Fed has been a notoriously lousy economic forecaster.

And inflationary wildfire is nothing to play with. As former Fed chief Paul Volcker famously told the Economic Club of New York in 2013, All experience demonstrates that inflation, when fairly and deliberately started, is hard to control and reverse.

If the Fed is wrong about inflation in 2016 and beyond, just as it was wrong about the gravity of the subprime-mortgage crisis in 2007, the most prudent course of action is to get prepared with precious metals.

Savers are $7.7 billion poorer thanks to 10 years of Fed insanity

Posted on

Audit the Fed is a cry often heard by its critics, who are intent on uncovering the cozy relationship between the central bank and Wall Street. But if you needed the damage done by the Federal Reserve on everyday savers quantified, look no further than a study by NerdWallet.

The personal-finance Web site used data from the Bureau of Economic Analysis to compare Americans post-tax disposable incomes and savings rates in 2006 versus those in 2016.

Its findings? The Feds zero-rate interest policy and quantitative-easing money-printing exercises have cost savers a whopping $7.7 billion over the past decade.

Years before normalization is felt: While Wall Street saw the S&P 500 stock index gain 60% thanks to this monetary heroin of cheap money, Joe and Jane Six-Pack have seen their savings accounts go nowhere, and the U.S. economy has managed to eke out only negligible growth in the 2% to 2.5% range.

Despite the fact that the Fed raised interest rates for the first time in almost a decade in December 2015, the trend is unlikely to change soon, CNBC predicted. Even if the Fed gets back on the path to normalization, it probably will be years before savers see significant rewards.

This lack of rewards has driven many savers into markets they dont quite understand, like stocks, in a desperate search for yield. Alternatively, all too often these savers on fixed incomes, many of whom are senior citizens, have slogged on earning next to nothing from bank accounts and money-market funds because they are paralyzed by the thought of gambling and losing on stocks in their twilight years.

Its a reality that people who have fixed incomes do rely on savings accounts. Thats something we would recommend against, said NerdWallets Devan Goldstein. Somewhere in the toolkit between savings accounts and an index fund is a low-risk but slightly higher return vehicle.

Gold delivered in past decade: And there is another alternative. Other options to consider are alternatives such as real estate or precious metals, Goldstein noted, according to a CBS News report on NerdWallets findings.

The tide is once again turning toward precious metals, even more decisively now that negative interest rates are rapidly replacing zero interest rates in Japan and Europe.

And look at where these savers might be had they allocated some of their capital into gold. On Jan. 1, 2006, the price of gold was about $514 an ounce. Ten years later, on Jan. 4, 2016, the price was at $1,077. Thats a gain of 109.53%! With the price now at roughly $1,229, gold has returned 139.11%

And certain types of rare, numismatic gold, silver, and copper coins have seen even higher gains.

With the Feds low-rate policies clearly stiffing savers for a decade now, savers would be insane to keep banking on simple deposit and money-market accounts. The definition of insanity is doing the same thing over and over while expecting a different result. The alternative to the Feds inflationary thievery is clear: gold and silver bullion plus rare coins.

Silver coin, ETF sales continue surging as China increase grip on market

Posted on

Its no secret that the gold price has outpaced silver so far in 2016, but investors are still piling into the latter metal via both coins and ETFs, helping fuel an 11% run higher this year.

The U.S. Mint has sold 12.7 million ounces of silver American Eagle coins, as of March 14. That pace is more than 27% higher than the same period during last years record sales run, when 47 million ounces were purchased.

Meanwhile, Bloomberg reported that holdings in silver ETFs have reached their highest level in seven months, and hedge funds and other money managers hold a near-record bet on further price gains via the futures market.

5% supply drop predicted: Economic uncertainty isnt the only driver of silver prices this year. According to the Silver Institutes February newsletter, a supply-demand squeeze is taking shape. Silver industrial demand, the largest component of total silver offtake, is set to increase its share of total demand in 2016, it said, citing in particular growing use of solar power, which uses the metal. In addition, global mine supply production is projected to fall in 2016 by as much as 5% year-on-year. This would represent the first reduction to global silver mine production since 2002. The firm also is predicting further weakening in scrap supply.

And the institute is not alone in this forecast. Standard Chartered Plc has concurred, saying mine production of silver will probably drop in 2016 for the first time in over a decade and demand is set to outstrip supply for a fourth straight year, according to a Bloomberg report.

Firm sees $21 price in 2017: With the gold-silver ratio still above 80-to-1, the imbalance suggests that silver is very undervalued relative to gold. Capital Economics is even forecasting the white metal will hit $21 in 2017, potentially taking the ratio back near 65-to-1.

And while Chinas appetite for gold usually gets all the attention, it has quietly staked out a powerful position in the global silver market.

Chinese bank takes London role: Reporting at USA Today, Dave Forest of Oilprice.com noted that the futures-exchange operator CME Group, which manages the price-setting mechanisms in London, announced that the China Construction Bank will officially become a member in that process. CCB will join HSBC, JPMorgan Chase, the Bank of Nova Scotia, Toronto Dominion Bank, and UBS.

The first time that China will have direct influence on this process, Forest said. And the entry of China Construction Bank into the market could also have some other important consequences for precious metals.

How so? By helping China offer yuan-denominated silver contracts both domestically and in London. That plays into Chinas strategy of internationalizing its currency at the expense of the U.S. dollar.

Gold is always a sound investment, but the stars also are aligning for silver to take off in its wake.

Devastating retail-sales revisions a kick in the gut to GDP optimists

Posted on

The recent uptick in the stock market was widely touted as a sign that the dark clouds over the global economy had lifted.

As a result, gold has been falling this week in anticipation of the Federal Reserves policy statement Wednesday after its two-day meeting. Although its not expected to raise interest rates this week, conventional wisdom holds that it might do so at its June meeting.

But a funny thing happened on the way to the Marriner Eccles Building: U.S. retail-sales data were released for February, and the news was terrible for our consumer-driven economy, in which the manufacturing sector already is in recession.

Shocking 2-month decline: Retail sales fell 0.1% last month, and whats even worse, Januarys 0.2% gain was revised lower to a 0.4% drop. Retail sales have dropped 0.54% in the last two months the biggest sequential drop in a year, Zero Hedge noted.

Moreover, the new retail numbers bode ill for U.S. growth projections and for the idea that underlying economic conditions justify current stock prices. While the YoY change rose from +3.0% to +3.1%, it remains below historically-recessionary levels and given the revisions suggests Q1 GDP growth markdowns are on their way with sales down MoM for every cohort from gas stations to furniture, Zero Hedge added.

Fed, top banks cut GDP: And ZH was correct: The Atlanta Feds GDPNow forecasting tool reduced its first-quarter growth estimate to 1.9% from 2.2%, citing the retail report.

And private investment banks also followed suit. Barclays slashed its U.S. GDP forecast from 2.4% to 1.9% based on the sour retail numbers. Credit Suisse cut its target to 2% from 2.4%, while TD Securities reduced its number from 2.3% to 1.9%.

Perhaps the strongest statement came from CNBC star Jim Cramer, who called the new stats devastating. Im just kind of flummoxed, he said. A number comes out that makes us feel great, and then that number is taken away.

Fed now in no hurry to hike: The retail number takes the notion of a Fed rate hike in March pretty much off the table, some analysts say, forcing the central bank to balance that poor data against a nominally strong February employment report.

At the moment, it is hard to see GDP with a 2% handle. Based on todays lackluster sales report, policymakers will be in no hurry to raise interest rates, MUFG Union Bank economist Chris Rupkey told Reuters.

A low-rate environment signals unease with the current economic picture and therefore is supportive for gold.

Gold consolidates ahead of Fed as Morgan Stanley sees 30% recession odds

Posted on

Caution about two major central-bank meetings later this week sent gold into consolidation mode Monday.

After golds push to 13-month highs last Friday, the pullback to about $1,235 Monday afternoon was not unexpected given that the metal is sensitive to interest-rate moves from the Federal Reserve, which is conducting a two-day meeting that ends Wednesday. The Fed is expected to stand pat on rates but hint that another hike could be coming in June. The Bank of Japan, which imposed negative interest rates in January, also meets this week.

Following golds lead, silver dropped about 0.8% to hit $15.35.

481 tons bought on futures market: The cooldown comes as the latest CFTC positioning data shows that as of March 8, hedge funds and money managers increased their bullish positions to the highest level in 13 months. This was the eighth increase in net long positions in the last nine weeks, Commerzbank said. Since the beginning of the year, the equivalent of 481 tons of gold have thus been purchased via the futures market.

Moreover, inflows into gold-linked ETFs also continue to surge, at roughly 18-month highs and enjoying the longest stretch of gain since 2012.

Negative rates are driving investors into physical gold as well. Manager Takahiro Ito of the Tanaka Kikinzoku Kogyo K.K.s store in Tokyo said his clients are buying even as the price soars.

Many customers are wagering that its better to turn their savings to gold as a safe asset rather than deposit money at banks that offer low interest rates, he said.

Buybacks keeping S&P afloat: Gold also has paused as the stock market shows some signs of life. However, that could be a mirage, because a new Bloomberg analysis found that stock buybacks among S&P 500 component companies are on track to hit $165 billion.

Anytime when youre relying solely on one thing to happen to keep the market going is a dangerous situation, Andrew Hopkins of Wilmington Trust Co. noted. Over time, you come to the realization, Look, these companies cant grow. Borrowing money to buy back stocks is going to come to an end.

The lack of sound fundamentals supporting the stock market is just one reason why Morgan Stanley is slashing its stock-index targets and setting global recession odds at 30%.

Weaker growth forecasts and rising political risk lead us to close our positive tactical stance and lower exposure in global equities, it said. The probability of a global recession has risen.

IMF fears global derailment: As more proof in the pudding that all is not well with the global economy, the International Monetary Fund on Sunday endorsed the unconventional monetary policies of Europe and Japan (that is, negative rates and quantitative easing), citing rising risks worldwide.

The world is heading toward economic derailment unless policymakers make tough choices to get the recovery back on track, warned top IMF deputy David Lipton, saying downside risks are clearly much more pronounced than at the start of 2016.

Trend now flipped for gold: The burgeoning global risks have turned an increased number of firms into bulls on the yellow metal. Ned Davis Research is one such firm.

Since 2011, gold has had a very tough time relative to other major asset classes, it wrote. Why hold an asset with absolutely zero yield when its losing ground to every other major asset class? That trend has now flipped. Gold is starting to beat T-bills, long-term bonds stocks and even housing. That brings in even more interest thats already been generated.

The early stages of the rally were likely fueled by speculators and traders. Gold beating other asset classes gets it on the radar for other, longer-term strategic asset allocaters. Weve already seen these massive inflows into physical gold funds but there could be more if the strategic crowd gets involved.

Gold could hit $4,212: And CLSA strategist Christopher Wood thinks the price could even hit new all-time nominal highs if this bull market gains significant further steam. He sees the price potentially reaching $4,212 an ounce, basing his prediction on the fact that gold hit $850 in 1980 and per-capita U.S. incomes have risen 4.5% a year since then. Adjusting for rising incomes, he computes $4,212 for bullion prices.

One factor that could get the price there is rising investment from pension funds in search of yield in a negative-rate world. Wood recommends these funds take a 70% stake in gold. If even a small number of these funds were to take Woods advice, the price of gold would skyrocket, needless to say.

Gold surprises back to 13-month highs as ECBs monetary bazooka backfires

Posted on

Gold investors were bracing for a major dip in the yellow metal Thursday upon the European Central Banks bombshell announcement of more quantitative easing and further cuts to its deposit rate, which already is in negative territory, along with other measures.

That gold-price drop occurred initially, because the easing and rate-cutting measures in the euro currency conversely tend to strengthen the dollar.

Gold pulls off powerful reversal: But then ECB chief Mario Draghi spoke at a post-meeting news conference and said the central bank probably would not cut rates further in the future. From todays perspective and taking into account the support of our measures to growth and inflation, we dont anticipate that it will be necessary to reduce rates further, he said.

Markets reversed, with U.S. stocks and oil prices both falling.

You had the dollar go up and then down, and gold followed the dollars lead, TD Securities strategist Bart Melek told Bloomberg. Gold has an inverse relationship to the dollar, typically.

The fact that the ECB cut rates but did not implement tiered-deposit rates turned out to be the kicker and another big disappointment to the markets other than gold, Tyler Richey of The 7:00s Report told MarketWatch.

Markets see beer goggles come off: For Peter Boockvar of the Lindsey Group, the negative reaction of stocks proves that central banks are running out of ammo. Were experiencing firsthand the end of the road of the influence central bankers can have on the market, he said. Central bank policy put beer goggles on investors, and now those goggles are coming off.

Boockvar added: Todays not a question of did Draghi do more or less than expected. Hes just doing more of what has not worked.

As a result, investors are flocking to what has worked so far this year: gold. The yellow metal rose more than 1% to finish near $1,270 and 13-month highs. Silver advance 1.7% to $15.53 and remains bargain-priced when compared with golds recent runup, the gold-silver price ratio indicates.

Gold could be taking swing at $1,307: With gold holding steady in 2016, some major investment banks and analysts continue to issue bullish forecasts and revised price targets. We are not overly concerned about the pullback we saw in the past two days, as we think golds uptrend remains intact as long as the metal closes above $1,246, ScotiaMocatta analysts wrote.

In our view, gold will likely consolidate here before taking a swing at $1,307, a price unseen since January 2015.

And Rich Ross of Evercore ISI issued a note forecasting bearish movements in the S&P 500. My Bullish tactical call is over, he wrote. While we have repeatedly highlighted 2030 as our upside target, the rapid post ECB reversals in the cross asset technicals dictates that we abandon our tactical view at this time in favor of a far more defensive posture. Our structural Bear Market call with downside to 1,670 remains intact. We would sell Global Equities and Commodity Currencies (BRL, CAD, RUB) on the back of recent countertrend strength and buy Gold.

Citi sees 30% odds for $1,425: And even before the ECB meeting, Citi Research was forced to revise its price targets upward, although it still thinks the gold rally could run out of steam in the second half of the year.

Nonetheless, it put a 30% probability on gold reaching $1,425 by years end because of a further exacerbation of somewhat elevated US and global growth concerns, perhaps even a global recession, which sends prices above $1,400/oz. in 2H.

Given the possibility of that bullish scenario, Citi raised its gold targets by 11% and 5% in 2016 and 2017, to $1,185 and $1,110, respectively.

Time will tell whether gold folds as the year progresses, but with 2016 so far marked by unexpected surprises, we might see Citi revising its forecasts even further by Q3 or Q4. The Feds rate-setting meeting next week will tell investors more about the metals near-term direction.