Best of the Week
Most Popular
1.Are UK Savings Interest Rates Finally Starting to Rise? Best Cash ISA 2017 - Nadeem_Walayat
2.Inflation Tsunami - Supermarkets, Retail Sector Crisis 2017, EU Suicide and Burning Stocks - Nadeem_Walayat
3.Big Moves in the World Stock Markets - Big Bases - Rambus_Chartology
4.The Next Financial Implosion Is Not Going To Be About The Banks! - Gordon_T_Long
5.Why EU BrExit Single Market Access Hard line is European Union Committing Suicide - Nadeem_Walayat
6.Trump Ramps Up US Military Debt Spending In Preparations for China War - Nadeem_Walayat
7.Watch What Happens When Silver Price Hits $26...  - MoneyMetals
8.Stock Market Fake Risk, Fake Return? Market Crash? - 2nd Mar 17 - Axel_Merk
9.Global Inflation Surges, Central Banks Losing Control and Triggered the Wage Price Spiral? - Nadeem_Walayat
10.Why Gold Will Boom In 2017 - James Burgess
Last 7 days
Top Ten US Dollar Risks - 27th Mar 17
The Popularity of Gambling and Investing Amongst Students - 27th Mar 17
Is Political Betting on the Rise? - 27th Mar 17
US Stock Market Consolidation Time - 27th Mar 17
Russia Crisis - Maps That Signal Growing Instability and Unrest - 27th Mar 17
Goldman Sachs Backing A Copper Boom In 2017 - 27th Mar 17
Foundation – Fall Of The American Galactic Empire - 27th Mar 17
Stock Market More Correction Ahead - 27th Mar 17
US Dollar Inflection Point - 27th Mar 17
Political Week Presurres US Stock Market - 25th Mar 17
London Terror Attack Red Herring, Real Issue is Age of Reason vs Religion - 25th Mar 17
Will Washington Risk WW3 to Block an Emerging EU-Russia Superstate - 25th Mar 17
Unaccountable Military Industrial Complex Is Destroying America and the Rest Of The World Too - 25th Mar 17
Silver Mining Stock Fundamentals - 24th Mar 17
A Walk Down the Dark Road of Bad Government - 24th Mar 17
Is Stock Market Flash Crash Postponed Until Monday? - 24th Mar 17
Stock Market Bubble and Gold - 24th Mar 17
Maps Of Past Empires That Can Tell Us About The Future - 24th Mar 17
SNP Independent Scotland's Destiny With Economic Catastrophe, the English Subsidy - IndyRef2 - 24th Mar 17
Stock Market VIX Cycles Set To Explode March/April 2017 – Part II - 23rd Mar 17
Is Now a Good Time to Invest in the US Housing Market? - 23rd Mar 17
The Stock Market Is a Present-Day Version of Pavlov’s Dog - 23rd Mar 17
US Budget - There’s Almost Nothing Left To Cut - 23rd Mar 17
Stock Market Upward Reversal Or Just Quick Rebound Before Another Leg Down? - 23rd Mar 17
Trends to Look Out For as a Modern-day Landlord - 23rd Mar 17
Here’s Why Interstate Health Insurance Won’t Fix Obamacare / Trumpcare - 23rd Mar 17
China’s Biggest Limitations Determine the Future of East Asia - 23rd Mar 17
This is About So Much More Than Trump and Brexit - 23rd Mar 17
Trump Stock Market Rally Over? 20% Bear Drop By Mid Summer? - 22nd Mar 17
Trump Added $3 Trillion in Wealth to Stock Market Participants - 22nd Mar 17
What's Next for the US Dollar, Gold and Stocks? - 22nd Mar 17
MSM Bond Market Full Nonsense Mode as ‘Trump Trades’ Unwind on Schedule - 22nd Mar 17
Peak Gold – Biggest Gold Story Not Being Reported - 22nd Mar 17
Return of Sovereign France, Europe’s Changing Landscape - 22nd Mar 17
Trump Stocks Bull Market Rolling Over? You Were Warned! - 22nd Mar 17
Stock Market Charts That Scream “This Is It” - Here’s What to Do - 22nd Mar 17
Raising the Minimum Wage Is a Jobs Killing Move - 22nd Mar 17
Potential Bottoming Patterns in Gold and Silver Precious Metals Stocks Complex... - 22nd Mar 17
UK Stagflation, Soaring Inflation CPI 2.3%, RPI 3.2%, Real 4.4% - 21st Mar 17
The Demise of the Gold and Silver Bull Run is Greatly Exaggerated - 21st Mar 17
USD Decline Continues, Pull SPX Down as well? - 21st Mar 17
Trump Watershed Budget - 21st Mar 17
How do Client Acquisition Offers Affect Businesses? - 21st Mar 17
Physical Metals Demand Plus Manipulation Suits Will Break Paper Market - 20th Mar 17
Stock Market Uncertainty Following Interest Rate Increase - Will Uptrend Continue? - 20th Mar 17
Precious Metals : Who’s in Charge ? - 20th Mar 17
Stock Market Correction Continues - 20th Mar 17
Why The Status Quo Is Under Increasing Attack By 'Populist People Power' - 20th Mar 17

Market Oracle FREE Newsletter

Elliott Wave Trading

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.


© 2005-2016 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