Best of the Week
Most Popular
1.US Paving the Way for Massive First Strike on North Korea Nuclear and Missile Infrastructure - Nadeem_Walayat
2.Trump Reset: US War With China, North Korea Nuclear Flashpoint - Video - Nadeem_Walayat
3.Silver Junior Mining Stocks 2017 Q2 Fundamentals - Zeal_LLC
4.Soaring Inflation Plunges UK Economy Into Stagflation, Triggers Government Pay Cap Panic! - Nadeem_Walayat
5.The Bitcoin Blueprint To Your Financial Freedom - Sean Keyes
6.North Korea 'Begging for War', 'Enough is Enough', is a US Nuclear Strike Imminent? - Nadeem_Walayat
7.Bitcoin Hits All-Time High and Smashes Through $5,000 As Gold Shows Continued Strength - Jeff_Berwick
8.2017 is NOT "Just Another Year" for the Stock Market: Here's Why - EWI
9.Gold : The Anatomy of the Bottoming Process - Rambus_Chartology
10.Bitcoin Falls 20% as Mobius and Chinese Regulators Warn - GoldCore
Last 7 days
Stocks, Gold, Dollar, Bitcoin Markets Analysis - 23rd Sep 17
How Will We Be Affected by a Series of Rate Hikes? - 23rd Sep 17
Fed Quantitative Tightening Impact on Stocks and Gold - 22nd Sep 17
Bitcoin & Blockchain: All Hype or Part of a Financial Revolution? - 22nd Sep 17
Pensions and Debt Time Bomb In UK: £1 Trillion Crisis Looms - 22nd Sep 17
Will North Korea Boost Gold Prices? Part I - 22nd Sep 17
USDJPY Leads the way for a Resurgent Greenback - 22nd Sep 17
Day Trading Guide for Dummies - 22nd Sep 17
Short-Term Uncertainty, As Stocks Fluctuate Along Record Highs - 21st Sep 17
4 Reasons Gold is Starting to Look Attractive as Cryptocurrencies Falter - 21st Sep 17
Should Liners Invest in Shipping Software Solutions and Benefits of Using Packaged Shipping Software - 21st Sep 17
The 5 Biggest Bubbles In Markets Today - 20th Sep 17
Infographic: The Everything Bubble Is Ready to Pop - 20th Sep 17
Americans Don’t Grasp The Magnitude Of The Looming Pension Tsunami That May Hit Us Within 10 Years - 20th Sep 17
Stock Market Waiting Game... - 20th Sep 17
Precious Metals Sector is on Major Buy Signal - 20th Sep 17
US Equities Destined For Negative Returns In The Next 7 Years - 3 Assets To Invest In Instead - 20th Sep 17
Looking For the Next Big Stock? Look at Design - 20th Sep 17
Self Employed? Understanding Business Insurance - 19th Sep 17
Stock Market Bubble Fortunes - 19th Sep 17
USD/CHF – Verification of Breakout or Further Declines? - 19th Sep 17
Blockchain Tech: Don't Say You Didn't Know - 19th Sep 17
The Fed’s 2% Inflation Target Is Pointless - 19th Sep 17
How To Resolve the Korean Conundrum  - 19th Sep 17
A World Doomed to a Never Ending War - 19th Sep 17
What is Backtesting? And Why You Need Backtesting System? - 19th Sep 17
These Two Articles Debunk The Biggest Financial Nonsense I See In The Media - 18th Sep 17
Bitcoin Price Crash 40% In 3 Days Underlining Gold’s Safe Haven Credentials - 18th Sep 17
The Sum of Risks – Global, Strategic, Political, and Financial - 18th Sep 17
The Netflix Of Canada’s Cannabis Boom - 18th Sep 17
Stock Market Sentiment Speaks: Either You Learn From The Events Of The Past Week, Or You Are Hopeless - 18th Sep 17
SPX 2500 … At Last! - 18th Sep 17
Inflation Lies, Lies and OMG More Lies - 18th Sep 17
How to Choose right Forex Trader? - 18th Sep 17
Who Has Shaped the World the Most? The Dozen Greatest Achievers - 17th Sep 17
Riding the ‘Slide’: Is This What the Next Stocks Bear Market Looks Like? - 17th Sep 17
Gold Up, Markets Fatigued As War Talk Boils Over - 17th Sep 17
Predicting the Future of the U.S. and the World - 16th Sep 17
Deceit in the Financial Food Chain - 16th Sep 17
Gold GLD ETF Investment Resuming - 16th Sep 17
Extreme Weather & Energy Markets: What's Next? - Video - 15th Sep 17
Trump’s Path to IP Wars - 15th Sep 17
GBP USD Approaches Fibonacci Target - 15th Sep 17
Higher US Interest Rates May Force Higher Inflation Rates - 15th Sep 17
Stock Market Investors: Taking the Road "Less Traveled" Has Its Perks - 15th Sep 17
The 3 Best P2P Lending Platforms For Investors In 2017—Detailed Analysis - 15th Sep 17
The US Debt Bubble Will Soon Warrant Serious Measures - 15th Sep 17
Why it is Often Difficult to Sell a House Fast - 15th Sep 17

Market Oracle FREE Newsletter

3 Videos + 8 Charts = Opportunities You Need to See - Free

7 Market Predictions for 2016: Gold, Energy, Stocks, Bitcoin

Stock-Markets / Financial Markets 2016 Jan 02, 2016 - 01:37 PM GMT

By: Jason_Hamlin

Stock-Markets

Despite my hesitation in writing another piece like this, people seem to love prediction articles. It used to be an easier task to simply identify and go with the trends, but so much is now up to the whims of central planners that it is nearly impossible to have much accuracy. These are just my best guesses and I will make sure to revisit them in another 12 months to see how well they held up. Here are my seven predictions for 2016:


#1) The stock market corrects sharply from overbought levels, driven partly by increasing interest rates. The S&P 500 will drop by 25% or more during 2016 as a global recession unfolds. Economic data shows patterns similar to what was witnessed right before the last recession. The FED has little wiggle room to prop it up like they did last time around, but may be forced to reverse course on rates and introduce a new stimulus program by year end.

#2) The USD continues to strengthen versus other currencies, as the FED raises rates and other central banks continue to cut their rates. Our fractional reserve fiat monetary system is a great scourge on the world in my view. It enriches the few at the expense of the many and must be enforced at the barrel of a gun. We will likely see an increased trend of de-dollarization during 2016, particularly as the BRICS nations move away from using the USD in trade. Nevertheless, the USD remains the best of the fiat currencies and it will likely benefit from its perception as a safe haven when investors begin to flee stocks en masse.

#3) The unemployment rate reverses course and moves higher during 2016. The official unemployment rate (U3) has been cut in half since the financial crisis unfolded in 2008. It spiked to 10% during 2009, but has since dropped to just 5% in late 2015. Of course, a large portion of this decline was driven by a lower participation rate, sacrificing quality for quantity, more part-time jobs and BLS manipulation of data to brighten the overall jobs landscape. Alternative calculations of true unemployment remain near all-time highs around 24%. In 2016, the U3 unemployment number will stop falling and eventually begin to move higher for the first time in years.

#4) Home prices flatline and begin to trend lower during the second half of the year. Home prices have put in an impressive rebound over the past five years, but the rally is losing steam. During 2016, I expect a continuation of modest price gains in the first half of the year, then flatlining price growth and an eventual drop in home prices by the end of the year. This trend will be driven by rising interest rates that make homes less affordable, an increasing supply of new homes hitting the market and another peak in the median home price/median income ratio.

#5) Gold will finally carve out a base and bottom in the $950 to $1,050 range. The gold price will show a high level of volatility and ultimately close out 2016 with a gain of 20% or more. The silver price will follow gold, with a higher level of volatility in both directions. Precious metals will likely get dragged down initially in any economic crisis, but the monetary will bounce back quickly and re-assert themselves as true safe haven assets. With such a small level of investor participation in gold and silver currently, it will not take much a shift of funds into this relatively tiny market to move the prices significantly higher.

#6) Energy prices will continue to dip in the first half of 2016, but will eventually find a bottom and trend higher. The price of oil will test $30/barrel and dip as low as $25/barrel, but will bounce sharply and end the year closer to $50/barrel.

#7) The price of bitcoin will rocket to a new high above $1,200 during 2016. Bitcoin will gain greater acceptance in the mainstream financial world and the blockchain technology will flourish as it finds a variety of new uses. As the global recession intensifies and currency wars continue, people around the world will turn to bitcoin as a means of protecting their wealth and transferring it across borders.

#Bonus Predictions: Increased tensions with Russia in the Middle East, thousands of U.S. boots on the ground, ISIS is effectively wiped out, an assassination attempt on Donald Trump, Bernie Sanders giving Clinton a close race for the Democratic nomination, more domestic terrorism and mass shootings in the election year, executive action by Obama to increase gun control, unusual weather patterns causing a spike in natural disasters, a big earthquake hits California, Golden State beats the Cavs in the NBA finals, marijuana legalization sweeps the nation.

We will be positioning the Gold Stock Bull portfolio to take advantage of these trends in 2016. If you aren’t already a premium member, you can sign up here to receive the newsletter, model portfolio and trade alerts. Enter the coupon code 2016GO for 20% OFF any membership if you sign up today. Happy new year!

By Jason Hamlin

http://www.goldstockbull.com/

Jason Hamlin is the founder of Gold Stock Bull and publishes a monthly contrarian newsletter that contains in-depth research into the markets with a focus on finding undervalued gold and silver mining companies. The Premium Membership includes the newsletter, real-time access to the model portfolio and email trade alerts whenever Jason is buying or selling. Click here for instant access!

Copyright © 2015 Gold Stock Bull - All Rights Reserved

All ideas, opinions, and/or forecasts, expressed or implied herein, are for informational purposes only and should not be construed as a recommendation to invest, trade, and/or speculate in the markets. Any investments, trades, and/or speculations made in light of the ideas, opinions, and/or forecasts, expressed or implied herein, are committed at your own risk, financial or otherwise. The information on this site has been prepared without regard to any particular investor’s investment objectives, financial situation, and needs. Accordingly, investors should not act on any information on this site without obtaining specific advice from their financial advisor. Past performance is no guarantee of future results.


© 2005-2017 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

Catching a Falling Financial Knife