President’s Day Dawn Finds Precious Metals Quiet

The Market Gage - Dillon Gage's Precious Metals Newsletter

Ready for Signals….

With President’s Day upon us, our markets are a little quieter than usual. But as this Monday dawns, all eyes appear to be on several members of the Federal Reserve, of which the heads of five regional Fed banks are slated to give speeches before Friday. As we well know, a few comments here or there regarding the rise or hold of interest rates seem to trigger quick activity in the precious metals market. The next scheduled full meeting of the FOMC is slated for mid-March. The FedWatch Tool from CME Group is indicating an 82 percent chance of at least a half a point interest rate hike.

Inflow into Gold ETFs actually reversed course on Friday, with an outflow of 2.4 tons—the first such occasion in the last month.

We continue to look overseas to the European market for other indicators. Sovereign debt is as big a problem abroad as it is at home. Any changes in the Euro-Zone will have to be monitored this week.

At the time of this writing, spot prices for gold are currently holding steady at $1,238.60. Silver checks in at $18.04.

Have a wonderful week and stay tuned…

Disclaimer: This editorial has been prepared by a senior precious metals expert of Dillon Gage Metals. This document is for information and thought-provoking purposes only and does not purport to predict or forecast actual results. It is not, and should not be regarded as investment advice or as a recommendation regarding any particular security, commodity or course of action. Opinions expressed herein are current opinions as of the date appearing in this editorial only and are subject to change without notice and cannot be attributable to Dillon Gage. Reasonable people may disagree about the opinions expressed herein. In the event any of the assumptions used herein do not come to fruition, results are likely to vary substantially. All investments entail risks. There is no guarantee that investment strategies will achieve the desired results under all market conditions and each investor should evaluate its ability to invest for a long term especially during periods of a market downturn. No part of this editorial may be reproduced in any manner, in whole or in part, without the prior written permission of Dillon Gage Metals. This information is provided with the understanding that with respect to the opinions provided herein, that you will make your own independent decision with respect to any course of action in connection herewith and as to whether such course of action is appropriate or proper based on your own judgment, and that you are capable of understanding and assessing the merits of a course of action. You may not rely on the statements contained herein. Dillon Gage Metals shall not have any liability for any damages of any kind whatsoever relating to this editorial. You should consult your advisors with respect to these areas. By posting this editorial, you acknowledge, understand and accept this disclaimer.


Wall Street Roaring & Precious Metals Still Making Noise

Walter is on vacation through 2/21/17. This post was written by a Dillon Gage Precious Metals Staff expert.

Steady as She Goes…

Champagne corks continue to pop all along Wall Street, as the stock market continued a record-shattering week in which all-time highs were achieved several days in a row. Overall from this same point last week, it measures out at just under a three percent overall gain. You’d have to go all the way back to 1991-92 for a similar streak. Whether it’s all attributed to the “Trump Bump” or not, things are looking pretty rosy in New York’s financial district.

Lately, metals haven’t been too bad off either, with a weakened and lower U.S. dollar boosting spot prices for gold. On the global stage, equity markets have stagnated a bit, leaving investors a tad bullish on precious metals as a safe haven. At last check this morning, the price of gold is holding above $1,240 per ounce.

The silver market continues to shine, with a seven-week uptrend in prices. Silver futures prices hit a three-month high yesterday and currently sit at $18.05 per ounce.

Found an interesting precious metals tidbit in the news yesterday—a Federal judge in Ohio has signed an order which would permit deep-sea treasure diver Tommy Thompson to reveal the location of 500 missing gold coins he retrieved from the sunken S.S. Central America, which went to the bottom of the sea in a hurricane in 1857. Thompson is currently being held in contempt of court for his silence on the matter. Interesting story all around.

Have a wonderful weekend and stay tuned…

Disclaimer: This editorial has been prepared by a staff member of Dillon Gage Metals. This document is for information and thought-provoking purposes only and does not purport to predict or forecast actual results. It is not, and should not be regarded as investment advice or as a recommendation regarding any particular security, commodity or course of action. Opinions expressed herein are current opinions as of the date appearing in this editorial only and are subject to change without notice and cannot be attributable to Dillon Gage. Reasonable people may disagree about the opinions expressed herein. In the event any of the assumptions used herein do not come to fruition, results are likely to vary substantially. All investments entail risks. There is no guarantee that investment strategies will achieve the desired results under all market conditions and each investor should evaluate its ability to invest for a long term especially during periods of a market downturn. No part of this editorial may be reproduced in any manner, in whole or in part, without the prior written permission of Dillon Gage Metals. This information is provided with the understanding that with respect to the opinions provided herein, that you will make your own independent decision with respect to any course of action in connection herewith and as to whether such course of action is appropriate or proper based on your own judgment, and that you are capable of understanding and assessing the merits of a course of action. You may not rely on the statements contained herein. Dillon Gage Metals shall not have any liability for any damages of any kind whatsoever relating to this editorial. You should consult your advisors with respect to these areas. By posting this editorial, you acknowledge, understand and accept this disclaimer.


American Eagles Sales as of 2/16/17

U.S. Mint Year to Date Sales of Silver and Gold American Eagles

The following chart includes the year to date totals for 2017 from the U.S. Mint as of 5pm on February 16th. The chart also shows the change in sales from 2/9/2017 which we reported last Friday.

Gold
Coin Sales in oz. /#coins + from 2/9/2017
One oz.
102,500
102,500
4,500
4,500
Half oz.
11,500
23,000
000
000
Quarter oz.
9,000
36,000
000
000
Tenth oz.
14,000
140,000
500
5,000
Total
137,000
301,500
5,000
9,500
Silver
Coin Sales in oz. /#coins + from 2/9/2017
One oz.
5,687,500
5,687,500
310,000
310,000

Fed Chair Yellen Back on the Hill Today

The Market Gage - Dillon Gage's Precious Metals Newsletter

Fed Chairwomen Janet Yellen is back on the hill today for her second day of testimony. She’s taking a hawkish stance on future rate hikes and putting pressure on the price of gold this morning. It seems that the future track of the price of gold is in her hands. Yesterday she indicated that it would be unwise to wait too long before raising rates. The possibility of multiple rate hikes this year is driving the dollar higher which in turn hurting the price of gold.

Some Wall Street Gold traders I spoke with are indicating that “IF” the 100-day moving average at $1,214.25 (spot) is violated they will reverse their long position and play this market from the short side. I expect if that happens, the selling will accelerate the decline in the price as we head back and test the $1,200 dollar level again.

BUT one can’t give up on gold yet. Yes, we are feeling the pressure and are extremely vulnerable to any negative news, but the price of gold has held up pretty well even with the equity markets and the S&P setting new all-time highs almost every day. Also the inflows by commodity funds into the Gold ETFs has helped the price from trading lower. What do they know that we don’t?

We have all heard the saying “talk is cheap,” well I’m still waiting for a tax plan that everyone will be extremely happy with, a wonderful the new Health Care Program and the data on how well the economy is doing. But until then we need to clear out all the “smoke and mirrors” and put your money where your mouth is, because if this doesn’t materialize sometime soon, the Trump honeymoon rally in equities will run out of gas and a significant correction will be right around the corner.

And yes even with the price of gold just hanging around taking slaps to the face each day, it will once again be the safe haven investment to turn to.

You could say I’m a little impatient. How about you? My wife says I watch too much business news and it’s effecting my thinking. Maybe so, but I’m addicted. I’m like a soap opera junkie. I just can’t help myself. That’s why a short vacation is in order. I will be back in the office on Wednesday next week. Until then.

All the best and have a wonderful Wednesday.

Disclaimer: This editorial has been prepared by Walter Pehowich of Dillon Gage Metals. This document is for information and thought-provoking purposes only and does not purport to predict or forecast actual results. It is not, and should not be regarded as investment advice or as a recommendation regarding any particular security, commodity or course of action. Opinions expressed herein are current opinions as of the date appearing in this editorial only and are subject to change without notice and cannot be attributable to Dillon Gage. Reasonable people may disagree about the opinions expressed herein. In the event any of the assumptions used herein do not come to fruition, results are likely to vary substantially. All investments entail risks. There is no guarantee that investment strategies will achieve the desired results under all market conditions and each investor should evaluate its ability to invest for a long term especially during periods of a market downturn. No part of this editorial may be reproduced in any manner, in whole or in part, without the prior written permission of Dillon Gage Metals. This information is provided with the understanding that with respect to the opinions provided herein, that you will make your own independent decision with respect to any course of action in connection herewith and as to whether such course of action is appropriate or proper based on your own judgment, and that you are capable of understanding and assessing the merits of a course of action. You may not rely on the statements contained herein. Dillon Gage Metals shall not have any liability for any damages of any kind whatsoever relating to this editorial. You should consult your advisors with respect to these areas. By posting this editorial, you acknowledge, understand and accept this disclaimer.


FLASH GAGE – FED Chair Comments Ding Gold

Dillon Gage - Flash Market Update

FED Chair Janet Yellen is ready to testify before congress today just released this statement:

Waiting too long to raise interest rates would be “unwise” as economic growth continues and inflation rises.

Immediately as her comments were released, the price of gold sold off seven dollars.

Even so, the odds of a rate hike in March according to the CME Watch tool still stands at just 13 percent.

So with the odds that low, most economists do not expect a rate hike in March, but the Chairwoman did say that increases would be evaluated “at upcoming meetings.”

Soft support levels still stand at $1,222 in the April CME Futures contract and the next critical level is the 100-day moving spot average at $1,215.00.

Have a wonderful Tuesday.

Disclaimer: This editorial has been prepared by Walter Pehowich of Dillon Gage Metals. This document is for information and thought-provoking purposes only and does not purport to predict or forecast actual results. It is not, and should not be regarded as investment advice or as a recommendation regarding any particular security, commodity or course of action. Opinions expressed herein are current opinions as of the date appearing in this editorial only and are subject to change without notice and cannot be attributable to Dillon Gage. Reasonable people may disagree about the opinions expressed herein. In the event any of the assumptions used herein do not come to fruition, results are likely to vary substantially. All investments entail risks. There is no guarantee that investment strategies will achieve the desired results under all market conditions and each investor should evaluate its ability to invest for a long term especially during periods of a market downturn. No part of this editorial may be reproduced in any manner, in whole or in part, without the prior written permission of Dillon Gage Metals. This information is provided with the understanding that with respect to the opinions provided herein, that you will make your own independent decision with respect to any course of action in connection herewith and as to whether such course of action is appropriate or proper based on your own judgment, and that you are capable of understanding and assessing the merits of a course of action. You may not rely on the statements contained herein. Dillon Gage Metals shall not have any liability for any damages of any kind whatsoever relating to this editorial. You should consult your advisors with respect to these areas. By posting this editorial, you acknowledge, understand and accept this disclaimer.


Gold Under Pressure As Dollar Index Aims At 101

The Market Gage - Dillon Gage's Precious Metals Newsletter

The price of gold this morning under pressure as the dollar index approaches the 101 level again and ten year bonds yields advance. At the time of this report the price of gold is trading below the most recent support level at $1,128 and approaching a double bottom in the charts at $1,222. If the selloff continues, Wall Street gold traders tell me that they will be watching for the 100-day moving average at spot $1,216.25 before jumping back into the market. Some indicated this morning that they are happy with their current long position in the market, but see no reason at this level to add any more on. My take is, if the 100-day moving average is violated selling will accelerate bringing new shorts into the market place and the Wall Street longs will have to cover quickly.

Keeping the price of Gold from pulling back further has been the continued support in the Gold ETF arena.
Friday we saw an increase of over 400,000 ounces into the funds. Seems like all commodity fund activity.
Financial advisors still see little or no action by retail investors in the ETF market. Retail investors love affair with equities continues as the Dow Industrial Average looking at a higher opening this morning.

Refiners reporting steady demand from wholesalers and retail coin shops report decent store traffic.

The price of silver seems to have a mind of her own, happy with just hanging around the $18 dollar level. In the event we see a selloff in the gold down to its support levels, silver should follow. My technical friends tell me there is no support level to share with us in silver until $ 17.48 level is met in the March contract.

With the equities so strong this morning, I expect that the first level of support to be tested later today.
I will be watching closely the action in the dollar and ten year treasury yields as they both seem to move
the price of gold every step of the way.

Have a wonderful Monday.

Disclaimer: This editorial has been prepared by Walter Pehowich of Dillon Gage Metals. This document is for information and thought-provoking purposes only and does not purport to predict or forecast actual results. It is not, and should not be regarded as investment advice or as a recommendation regarding any particular security, commodity or course of action. Opinions expressed herein are current opinions as of the date appearing in this editorial only and are subject to change without notice and cannot be attributable to Dillon Gage. Reasonable people may disagree about the opinions expressed herein. In the event any of the assumptions used herein do not come to fruition, results are likely to vary substantially. All investments entail risks. There is no guarantee that investment strategies will achieve the desired results under all market conditions and each investor should evaluate its ability to invest for a long term especially during periods of a market downturn. No part of this editorial may be reproduced in any manner, in whole or in part, without the prior written permission of Dillon Gage Metals. This information is provided with the understanding that with respect to the opinions provided herein, that you will make your own independent decision with respect to any course of action in connection herewith and as to whether such course of action is appropriate or proper based on your own judgment, and that you are capable of understanding and assessing the merits of a course of action. You may not rely on the statements contained herein. Dillon Gage Metals shall not have any liability for any damages of any kind whatsoever relating to this editorial. You should consult your advisors with respect to these areas. By posting this editorial, you acknowledge, understand and accept this disclaimer.


Gold Lagging On Ten-Year Bond Yields and Strong Dollar

The Market Gage - Dillon Gage's Precious Metals Newsletter

The dollar index approaching the 101 level this morning along with higher Ten-Year Bond Yields putting Gold in negative territory.

Some Wall Street Gold traders I spoke with this morning indicated that they expect gold to be under some pressure for the time being, as the equity market continues to set new records every day. But they also indicated that they view this pullback as a buying opportunity as they believe gold still has more room on the upside.

What I find interesting is the continued investment into the Gold ETFs by what I’m being told are large players and very little if any retail investor interest. Is that where the smart money is going?

Yesterday’s news on the President’s tax plan really put a torpedo in the side of gold as we broke thru the $1,228 level of support. The price of silver holding up much better, NOT approaching its level of support at $ 17.48.

As I indicated in yesterday’s Flash Gage, I expected the $1,228 support level to hold in the February Gold contract and we saw the overnight low get down to the $1,222 level. I still believe we will settle above that number today and head higher again now that the tax news has been absorbed into the marketplace.

All eyes over the pond are still watching Italy’s banking crisis. An interesting story in the Wall Street Journal this morning indicates that the Italian banking system is still having problems even after the government stepped in and set up a 20 billion Euro reserve fund to help Banca Monte Dei Paschi stay solvent. Italy’s banking system is still sitting on toxic
loans of over 200 billion Euros and doesn’t seem to have a plan to solve the problem other than throw money at it. I see this as “ground zero” for the problems facing the European Union that will come to a head in the near future and that’s when I expect the real rally in the gold market will begin.

Have a wonderful Friday.

Disclaimer: This editorial has been prepared by Walter Pehowich of Dillon Gage Metals. This document is for information and thought-provoking purposes only and does not purport to predict or forecast actual results. It is not, and should not be regarded as investment advice or as a recommendation regarding any particular security, commodity or course of action. Opinions expressed herein are current opinions as of the date appearing in this editorial only and are subject to change without notice and cannot be attributable to Dillon Gage. Reasonable people may disagree about the opinions expressed herein. In the event any of the assumptions used herein do not come to fruition, results are likely to vary substantially. All investments entail risks. There is no guarantee that investment strategies will achieve the desired results under all market conditions and each investor should evaluate its ability to invest for a long term especially during periods of a market downturn. No part of this editorial may be reproduced in any manner, in whole or in part, without the prior written permission of Dillon Gage Metals. This information is provided with the understanding that with respect to the opinions provided herein, that you will make your own independent decision with respect to any course of action in connection herewith and as to whether such course of action is appropriate or proper based on your own judgment, and that you are capable of understanding and assessing the merits of a course of action. You may not rely on the statements contained herein. Dillon Gage Metals shall not have any liability for any damages of any kind whatsoever relating to this editorial. You should consult your advisors with respect to these areas. By posting this editorial, you acknowledge, understand and accept this disclaimer.


American Eagle Sales as of 2/9/17

U.S. Mint Year to Date Sales of Silver and Gold American Eagles

The following chart includes the year to date totals for 2017 from the U.S. Mint as of 5pm on February 9th. The chart also shows the change in sales from 2/2/2017 which we reported last Friday.

Gold
Coin Sales in oz. /#coins + from 2/2/2017
One oz.
98,000
98,000
11,500
11,500
Half oz.
11,500
23,000
2,000
4,000
Quarter oz.
9,000
36,000
000
000
Tenth oz.
13,500
135,000
1,000
10,000
Total
132,000
292,000
14,500
25,500
Silver
Coin Sales in oz. /#coins + from 2/2/2017
One oz.
5,377,500
5,377,500
250,000
250,000

FLASH GAGE – Equity and S&P UP / Gold Down on Trump Tax Mention

President Trump meeting with airline executives at the White House this morning announcing
to the American people you will be very pleased with my tax plan that will be announced soon.

Equity markets react positively to the news. S&P hitting an intraday high after the news. Gold declining off the news as we view the dollar and Ten Year treasury yields up on the news.

The CME WATCH TOOL indicator, for the possibility of a rate hike in March up slightly on the news, up from 4 percent chance to 9 percent. Still nothing to be concerned about.

Levels of support indications are $ 1228 in the April gold contract and $ 17.48 in the March
Silver contract. I expect if these levels are violated we will see the current rally over for a while, but my sense is they will hold.

Have a wonderful Thursday.

Disclaimer: This editorial has been prepared by Walter Pehowich of Dillon Gage Metals. This document is for information and thought-provoking purposes only and does not purport to predict or forecast actual results. It is not, and should not be regarded as investment advice or as a recommendation regarding any particular security, commodity or course of action. Opinions expressed herein are current opinions as of the date appearing in this editorial only and are subject to change without notice and cannot be attributable to Dillon Gage. Reasonable people may disagree about the opinions expressed herein. In the event any of the assumptions used herein do not come to fruition, results are likely to vary substantially. All investments entail risks. There is no guarantee that investment strategies will achieve the desired results under all market conditions and each investor should evaluate its ability to invest for a long term especially during periods of a market downturn. No part of this editorial may be reproduced in any manner, in whole or in part, without the prior written permission of Dillon Gage Metals. This information is provided with the understanding that with respect to the opinions provided herein, that you will make your own independent decision with respect to any course of action in connection herewith and as to whether such course of action is appropriate or proper based on your own judgment, and that you are capable of understanding and assessing the merits of a course of action. You may not rely on the statements contained herein. Dillon Gage Metals shall not have any liability for any damages of any kind whatsoever relating to this editorial. You should consult your advisors with respect to these areas. By posting this editorial, you acknowledge, understand and accept this disclaimer.


Gold UP as Dollar and Treasury Yields Dip.

The Market Gage - Dillon Gage's Precious Metals Newsletter

The price of gold is marching forward as the dollar and treasury yields decline. The Gold ETFs overnight experiencing strong inflows from fund investors. Retail investors still involved in equities, although most of the Precious Metal Dealers I spoke with yesterday said store traffic has picked up over the last few days. A good sign of things to come.

Time to ask my technical friends for their take on the markets. Interesting enough was their comment this morning that they see a “SOFT” resistance level is at $1249 in the February contract then not till $ 1265 where do they see a hard hold at that level. I guess that’s good news that Gold would have more upside potential ahead of it.

They also indicated that $ 18 dollar level in the March futures contract will be a Hard resistance level to break thru, but just expect some consolidation at that level before the next hard level can be obtained at $ 18.32 in the March contract.

Overall, they see the price of gold with a better chance of reaching their levels of resistance.

On Monday, Philadelphia Fed President Patrick Harker said, “an interest rate hike should be on the table at the next Fed meeting in March.”

Now listen to what else he said: “I am still supportive of three rate hikes this year, of course with the major caveat depending on how the economy evolves and policy, fiscal policy evolves.”

Why bother saying this? What changed from the last Fed meeting in January? We all know its “DATA DEPENDENT.” Just look at these two factors. Wage growth has been disappointing and we had an increase in the participation rate. Isn’t that enough info to take a March rate hike off the table?

Obviously, the market doesn’t expect a rate in March as indicated by the latest CME Watch Tool, only predicting a 4 percent chance of a rate hike.

What continues to worry me is that there were times in the past, and I’m sure there will be times in the future, where a Fed president’s comments affect the price of gold. Some comments in the past have moved gold $30 dollars after they were released. The gold market has enough problems deciphering the news without unnecessary comments about future rate hikes. Fed chairwomen Janet Yellen already shared her opinion about future rate hikes. I still believe it’s in the best interest of everyone to just let the Fed minutes speak for themselves and eliminate Fed President’s comments between meetings. It would be more productive to just let the market trade on factual events.

If you remember last year they called for five rate hikes and what happened, one. I see it as no different this year. At the end of the year will this administration win calling for a weaker dollar benefitting exports and the price of gold or will the Fed win executing three rate hikes. I just don’t see how they both can get their way. But with all that’s going on these days, NOTHING is out of the question.

I will be keeping an eye today on both the dollar index and the ten yield treasury yields as I believe these two markets will be the driving force for the price of gold.

Have a wonderful Wednesday.

Disclaimer: This editorial has been prepared by Walter Pehowich of Dillon Gage Metals. This document is for information and thought-provoking purposes only and does not purport to predict or forecast actual results. It is not, and should not be regarded as investment advice or as a recommendation regarding any particular security, commodity or course of action. Opinions expressed herein are current opinions as of the date appearing in this editorial only and are subject to change without notice and cannot be attributable to Dillon Gage. Reasonable people may disagree about the opinions expressed herein. In the event any of the assumptions used herein do not come to fruition, results are likely to vary substantially. All investments entail risks. There is no guarantee that investment strategies will achieve the desired results under all market conditions and each investor should evaluate its ability to invest for a long term especially during periods of a market downturn. No part of this editorial may be reproduced in any manner, in whole or in part, without the prior written permission of Dillon Gage Metals. This information is provided with the understanding that with respect to the opinions provided herein, that you will make your own independent decision with respect to any course of action in connection herewith and as to whether such course of action is appropriate or proper based on your own judgment, and that you are capable of understanding and assessing the merits of a course of action. You may not rely on the statements contained herein. Dillon Gage Metals shall not have any liability for any damages of any kind whatsoever relating to this editorial. You should consult your advisors with respect to these areas. By posting this editorial, you acknowledge, understand and accept this disclaimer.


Gold and Silver Still Alive Per the CME Group

The Market Gage - Dillon Gage's Precious Metals Newsletter

The CME reported today that their average daily Gold future contract volumes averaged 525,000 in January, up from last year’s average daily volume of 405,000 contracts per day. That’s a 38 percent increase. Silver on the other hand rose 40 percent also showing a healthy increase.

Algorithm programs managed by hedge funds contributing to the increased trading volumes are indicated by the amount of switches executed in the Gold and Silver contracts. There are many different types of programs, from news driven to some that are just looking to take a dime on both sides of the market.

The price of gold breaking out of its most recent trading range this morning, surprisingly so, even with a stronger dollar on the board. The way I see it, if Gold can rally with the dollar index UP and over 100, that’s a good sign that higher prices are in the cards. But without any significant news I expect a one step back, two step forward price action. As I indicated in my first comment of the year, I expect gold to be higher by year end and still believe that will happen. The reasons are, I expect the Fed will be hard pressed to raise rates any time soon and with the madness in the political arena it could only help to increase the price over the near term. Plus one more important item: the Trump administration is still calling for a weaker dollar making our goods more attractive to the rest of the world.

Good inflows into the Gold and Silver ETFs on Friday. Gold increasing 332,764 ounces and silver up over one million ounces. These inflows still seem to be commodity fund related as the retail investors here in the states are still content holding on to their equity positions.

Physical demand for product in the Far East and in Europe still on the quiet side as reported by some traders.

Have a wonderful Monday.

Disclaimer: This editorial has been prepared by Walter Pehowich of Dillon Gage Metals. This document is for information and thought-provoking purposes only and does not purport to predict or forecast actual results. It is not, and should not be regarded as investment advice or as a recommendation regarding any particular security, commodity or course of action. Opinions expressed herein are current opinions as of the date appearing in this editorial only and are subject to change without notice and cannot be attributable to Dillon Gage. Reasonable people may disagree about the opinions expressed herein. In the event any of the assumptions used herein do not come to fruition, results are likely to vary substantially. All investments entail risks. There is no guarantee that investment strategies will achieve the desired results under all market conditions and each investor should evaluate its ability to invest for a long term especially during periods of a market downturn. No part of this editorial may be reproduced in any manner, in whole or in part, without the prior written permission of Dillon Gage Metals. This information is provided with the understanding that with respect to the opinions provided herein, that you will make your own independent decision with respect to any course of action in connection herewith and as to whether such course of action is appropriate or proper based on your own judgment, and that you are capable of understanding and assessing the merits of a course of action. You may not rely on the statements contained herein. Dillon Gage Metals shall not have any liability for any damages of any kind whatsoever relating to this editorial. You should consult your advisors with respect to these areas. By posting this editorial, you acknowledge, understand and accept this disclaimer.


American Eagle Sales as of 2/2/207

U.S. Mint Year to Date Sales of Silver and Gold American Eagles

The following chart includes the year to date totals for 2017 from the U.S. Mint as of 5pm on February 2nd. The chart also shows the change in sales from 1/26/2017 which we reported last Friday.

Gold
Coin Sales in oz. /#coins + from 1/26/2017
One oz.
86,500
86,500
11,500
11,500
Half oz.
9,500
19,000
500
1,000
Quarter oz.
9,000
36,000
000
000
Tenth oz.
12,500
125,000
1,000
10,000
Total
117,500
266,500
13,000
22,500
Silver
Coin Sales in oz. /#coins + from 1/26/2017
One oz.
5,127,500
5,127,500
230,000
230,000

Stronger Dollar Locks Gold in Trading Range

The Market Gage - Dillon Gage's Precious Metals Newsletter

This morning, a stronger dollar and higher 10-year bond yields are keeping the price of gold locked in a trading range. With the dollar index back over the 100 level this morning, its keeping gold from rallying thru the two key resistance levels in the February contract that were broken thru yesterday at $ 1,220 and $ 1,226.

Inflows in the Gold ETFs last couple of days seem to be fund related. None of the financial advisors I spoke with this morning indicated that there was any retail interest in investing in ETFs at this time.

In Wednesday’s comment I spoke about the possible breakup of the European Union. It’s time we look in our own backyard at the new policies being introduced by the Trump administration. By no means is it my intent to make this a political comment, just the opposite. I want to present this administration’s plan and let you decide if you believe the country is headed in the right direction.

Here’s my “Jobs” vs. “The cost of goods and services” – Cause and Effect analysis.

Let me list some of the things the President has on his agenda.

  • Cause: Asking, (I’m being polite) large corporations to bring manufacturing jobs back to America or create new opportunities for the American worker.
  • Effect: Lower unemployment, higher cost of products for American consumer.
  • Cause: Withdrawing from NAFTA. Imposing tariffs on Mexico and Canada to import their products.
  • Effect: Higher costs of goods for the American consumer.
  • Cause: Trade sanctions with China. Imposing import tariffs.
  • Effect: Higher cost of goods for the American consumer.
  • Cause: Higher minimum wage here in America.
  • Effect: More much needed disposable income for the lower middleclass. But would this in turn put some small businesses out of business? And would this force big business to look to go high tech to eliminate these jobs?
  • Cause: Tax cuts, both corporate and individual.
  • Effect: No matter how you look at this, this plan will turn into an expenditure in the beginning with the hope of growth in the economy increasing disposable income and eventually making this plan “ revenue neutral“?
  • Cause: The much fought over plan to revamp Obama Care. There are numbers all over the place on the cost of replacing Obama Care. It’s not worth my time trying to figure out how expensive this overhaul will be. I just don’t have a clue, but for sure it won’t be cheap.
  • Effect: Many Americans having the possibility of having no health care and adding to the countries debt in a big way.
  • Cause: The much needed infrastructure plan to repair our countries highway and bridges.
  • Effect: Some estimate this can cost the American tax payer over 1 trillion dollars.

I can go on and on with these proposals, but one must not forget the costs of entitlements facing our nation with the increasing costs of Social Security, Medicare and Medicaid. No one in Washington would even talk about these issues, but they do increase the country’s debt year after year.

As I said in the beginning of this comment, I’ll leave it up to you to decide if this is the right path for our nation.

So in the end where do we go from here and what shape will the U.S. economy be in four years from now? For that matter let’s look at where the price of gold will be trading a year from now based on all that’s proposed.

My Answer: “HIGHER”.

Have a wonderful Friday.

Disclaimer: This editorial has been prepared by Walter Pehowich of Dillon Gage Metals. This document is for information and thought-provoking purposes only and does not purport to predict or forecast actual results. It is not, and should not be regarded as investment advice or as a recommendation regarding any particular security, commodity or course of action. Opinions expressed herein are current opinions as of the date appearing in this editorial only and are subject to change without notice and cannot be attributable to Dillon Gage. Reasonable people may disagree about the opinions expressed herein. In the event any of the assumptions used herein do not come to fruition, results are likely to vary substantially. All investments entail risks. There is no guarantee that investment strategies will achieve the desired results under all market conditions and each investor should evaluate its ability to invest for a long term especially during periods of a market downturn. No part of this editorial may be reproduced in any manner, in whole or in part, without the prior written permission of Dillon Gage Metals. This information is provided with the understanding that with respect to the opinions provided herein, that you will make your own independent decision with respect to any course of action in connection herewith and as to whether such course of action is appropriate or proper based on your own judgment, and that you are capable of understanding and assessing the merits of a course of action. You may not rely on the statements contained herein. Dillon Gage Metals shall not have any liability for any damages of any kind whatsoever relating to this editorial. You should consult your advisors with respect to these areas. By posting this editorial, you acknowledge, understand and accept this disclaimer.


FLASH GAGE – Greece Grabs Headlines – Gold Climbs

Dillon Gage - Flash Market Update

What a surprise! Greece is back in the headlines again, holding both hands out looking for another bail out.

Gold is up this morning especially in Europe. As metal investors there digest the news on inflation, the highest in four years, and the potential Greece crisis encore.

Greek bonds are reflecting the concern as the Greek government bond yields climbed above 11 percent on January 31st, from about 5.5 percent a week earlier. Germany not happy that they will be looked upon for assistance once again and have asked help from the IMF.

No wonder French presidential candidate Marine Le Pen has expressed the desire to leave the EU. Greece bailout, Italy’s banking crisis, Portugal and Spain in terrible shape. Everyone in the EU is tired of the same old story and the talk at the water fountain is: We would rather take care of our own problems and not have to worry about the handout countries. It seems to many that the European Union was destined to fail from day one.

Well gold, once again will benefit from this kind of news. This morning we broke thru to levels of resistance in the April contract at $1,220 and $1,226 giving gold the potential for a further move to the upside.

Yesterday the Fed announced no rate hike and in my opinion, the way things are going in the economy, I expect they will be hard pressed to raise rates any time soon.

In tomorrow’s Market Gage I’ll share my thoughts on where this country is headed.

Have a wonderful Thursday.

Disclaimer: This editorial has been prepared by Walter Pehowich of Dillon Gage Metals. This document is for information and thought-provoking purposes only and does not purport to predict or forecast actual results. It is not, and should not be regarded as investment advice or as a recommendation regarding any particular security, commodity or course of action. Opinions expressed herein are current opinions as of the date appearing in this editorial only and are subject to change without notice and cannot be attributable to Dillon Gage. Reasonable people may disagree about the opinions expressed herein. In the event any of the assumptions used herein do not come to fruition, results are likely to vary substantially. All investments entail risks. There is no guarantee that investment strategies will achieve the desired results under all market conditions and each investor should evaluate its ability to invest for a long term especially during periods of a market downturn. No part of this editorial may be reproduced in any manner, in whole or in part, without the prior written permission of Dillon Gage Metals. This information is provided with the understanding that with respect to the opinions provided herein, that you will make your own independent decision with respect to any course of action in connection herewith and as to whether such course of action is appropriate or proper based on your own judgment, and that you are capable of understanding and assessing the merits of a course of action. You may not rely on the statements contained herein. Dillon Gage Metals shall not have any liability for any damages of any kind whatsoever relating to this editorial. You should consult your advisors with respect to these areas. By posting this editorial, you acknowledge, understand and accept this disclaimer.


FLASH GAGE – Fed Leaves Rates Unchanged

The Fed leaves rates unchanged. Here are some headlines out of the meeting:

  • FED LEAVES FEDERAL FUNDS RATE TARGET RANGE BETWEEN 0.5%-0.75%
  • FED SAYS FOMC VOTE WAS UNANIMOUS
  • FED SAYS MARKET-BASED INFLATION GAUGES ‘REMAIN LOW’
  • FED REPEATS EXPECTS ECONOMY TO WARRANT ONLY GRADUAL RATE HIKES
  • FED REPEATS NEAR-TERM RISKS TO OUTLOOK ‘ROUGHLY BALANCED’

Have a wonderful rest of your day.

Disclaimer: This editorial has been prepared by Walter Pehowich of Dillon Gage Metals. This document is for information and thought-provoking purposes only and does not purport to predict or forecast actual results. It is not, and should not be regarded as investment advice or as a recommendation regarding any particular security, commodity or course of action. Opinions expressed herein are current opinions as of the date appearing in this editorial only and are subject to change without notice and cannot be attributable to Dillon Gage. Reasonable people may disagree about the opinions expressed herein. In the event any of the assumptions used herein do not come to fruition, results are likely to vary substantially. All investments entail risks. There is no guarantee that investment strategies will achieve the desired results under all market conditions and each investor should evaluate its ability to invest for a long term especially during periods of a market downturn. No part of this editorial may be reproduced in any manner, in whole or in part, without the prior written permission of Dillon Gage Metals. This information is provided with the understanding that with respect to the opinions provided herein, that you will make your own independent decision with respect to any course of action in connection herewith and as to whether such course of action is appropriate or proper based on your own judgment, and that you are capable of understanding and assessing the merits of a course of action. You may not rely on the statements contained herein. Dillon Gage Metals shall not have any liability for any damages of any kind whatsoever relating to this editorial. You should consult your advisors with respect to these areas. By posting this editorial, you acknowledge, understand and accept this disclaimer.


Gold Drops Off Of Tuesday’s Rally

The Market Gage - Dillon Gage's Precious Metals Newsletter

All eyes on the Fed this afternoon as we await news on any rate hike. Odds of a rate on the CME Watch Tool this morning unchanged at 4pct. More important will be the language shared at the meeting.

Gold this morning is in negative territory as the dollar returns to the plus side along with treasury yields.

Here’s a headline from over the pond I want to share with you this morning showing inflation in the EU surging to the highest level in almost four years. According to the data released today, consumer prices in January grew the fastest since January 2013. Some are now calling for the European Central Bank (ECB) to cut back its bond buying program.

This past Sunday, members of France’s governing Socialist party elected Benoit Hamon as their choice to run in the April presidential election. The Socialist party had a choice between Benoit Hamon and former Prime Minster Manuel Valls. Early indications didn’t give either one a chance of winning the presidential election. There are other candidates that have a better chance including frontrunner, conservative Francios Fillon, far right wing candidate Marine LE Pen, centrist Emanual Macron and independent left wing candidate Jean-luc Melenchon.

It’s not my intention to bore you with this information, but to inform you that this election could have very serious consequences for the future of the European Union…which would then impact gold.

Why? Because if Marine Le Pen is elected, and yes she is gaining momentum, Ms. Pen has indicated that within the first six months in office she will put together a referendum for France to exit the EU. If that happens, there is a good chance it would be the end of the European Union as we know it.

Right now, many people in Europe believe that the anti-establishment movement that got Trump elected here in the states
and unexpectedly won the Brexit vote in England, is strong because people are tired of the same old politics and want a change.

So the first round of France’s presidential election is scheduled for April 23rd and in the event that no one candidate wins a majority, a run off will be held between the two leading vote getters in May.

Ok, let’s assume the Trump spirit is alive and well in the minds of the French voters, and that Ms. Marine Le Pen wins the election. Let’s also assume she is successful in getting the people of France to exit the EU. I’m sure you are asking yourself how this would affect the price of gold. Believe me, there will be many, many issues effecting the world economy if this happens and it should be a “GREAT” concern for all investors. But since this is a precious metals commentary we will just address the price of gold.

I don’t think anyone can argue that Italy, Greece, Spain and Portugal are bankrupt and will always be looking for a hand out.
First it was Greece needing a bailout, and if my memory is correct it was more than one Greek bank, then it was Italys Monte dei Paschi bank. Who knows who or what will be next. One has to believe that if France leaves the EU, Germany will be holding the bag (probably an empty one) supporting the rest of the EU’s troubled countries.

I can imagine before the EU goes away, that the ECB will have a lot to say about it. The question is, do they have enough fire power to stop it?

I don’t want to disappoint you. I really don’t have answer. I just cannot imagine this happening. But the same was said about the Brexit vote and when Trump was on stage competing against 15 other candidates. You just “never know.”

One thing is for sure, if the EU does break up, the demand for physical gold will be off the charts and no one knows how high the price will be or if there will be enough product to go around.

As my wife always tells me: “Be careful what you wish for.”

Oh, by the way if you have access to the Wall Street Journal on page b16 is an article on gold that is worth reading. If you don’t have access to it, it kind of summarizes why gold rallied
yesterday off a weaker dollar and political uncertainties. The Journal indicated that since Gold is traded around the world in dollar terms, which in turn a softer dollar will always attracts oversea gold investments.

Have a wonderful Wednesday.

Disclaimer: This editorial has been prepared by Walter Pehowich of Dillon Gage Metals. This document is for information and thought-provoking purposes only and does not purport to predict or forecast actual results. It is not, and should not be regarded as investment advice or as a recommendation regarding any particular security, commodity or course of action. Opinions expressed herein are current opinions as of the date appearing in this editorial only and are subject to change without notice and cannot be attributable to Dillon Gage. Reasonable people may disagree about the opinions expressed herein. In the event any of the assumptions used herein do not come to fruition, results are likely to vary substantially. All investments entail risks. There is no guarantee that investment strategies will achieve the desired results under all market conditions and each investor should evaluate its ability to invest for a long term especially during periods of a market downturn. No part of this editorial may be reproduced in any manner, in whole or in part, without the prior written permission of Dillon Gage Metals. This information is provided with the understanding that with respect to the opinions provided herein, that you will make your own independent decision with respect to any course of action in connection herewith and as to whether such course of action is appropriate or proper based on your own judgment, and that you are capable of understanding and assessing the merits of a course of action. You may not rely on the statements contained herein. Dillon Gage Metals shall not have any liability for any damages of any kind whatsoever relating to this editorial. You should consult your advisors with respect to these areas. By posting this editorial, you acknowledge, understand and accept this disclaimer.


FLASH GAGE- Dollar in Free Fall – Gold Rises

The US dollar in free fall this morning after comments by Peter Navarro, the head of President Trump’s national trade council, who said, “the Euro is grossly undervalued.” These comments echoed comments made earlier in the month by then President elect Trump that the US Dollar had gotten to strong.

The dollar index has broken thru the 99.50 level at the time of this “Flash Gage” and has given gold a boost, trading up over $ 20.00 on the day. Silver also benefitting from the rally is up over $.32 cents.

The 10 year treasury yield also taking it on the chin this morning down.0403.

Today is the first day of the FOMC meeting with an announcement on rates tomorrow expected at 2pm est. With the odds of a rate hike predicted by the CME FED WATCH Tool at only 4 pct. just a same old, same old response is expected Chairwomen Janet Yellen tomorrow. As always we await the language shared after the meeting.

Have a wonderful Tuesday.

Disclaimer: This editorial has been prepared by Walter Pehowich of Dillon Gage Metals. This document is for information and thought-provoking purposes only and does not purport to predict or forecast actual results. It is not, and should not be regarded as investment advice or as a recommendation regarding any particular security, commodity or course of action. Opinions expressed herein are current opinions as of the date appearing in this editorial only and are subject to change without notice and cannot be attributable to Dillon Gage. Reasonable people may disagree about the opinions expressed herein. In the event any of the assumptions used herein do not come to fruition, results are likely to vary substantially. All investments entail risks. There is no guarantee that investment strategies will achieve the desired results under all market conditions and each investor should evaluate its ability to invest for a long term especially during periods of a market downturn. No part of this editorial may be reproduced in any manner, in whole or in part, without the prior written permission of Dillon Gage Metals. This information is provided with the understanding that with respect to the opinions provided herein, that you will make your own independent decision with respect to any course of action in connection herewith and as to whether such course of action is appropriate or proper based on your own judgment, and that you are capable of understanding and assessing the merits of a course of action. You may not rely on the statements contained herein. Dillon Gage Metals shall not have any liability for any damages of any kind whatsoever relating to this editorial. You should consult your advisors with respect to these areas. By posting this editorial, you acknowledge, understand and accept this disclaimer.


Chinese New Year Prompts Quiet Day for Precious Metals

The Market Gage - Dillon Gage's Precious Metals Newsletter

Very quiet opening in our markets this morning due to the Chinese celebrating the Lunar New Year. Their markets will be closed thru Thursday for the celebration.

Gold nonetheless bid up in Europe, as investors there see geopolitical factors that could influence the price of Gold going forward.

One overseas gold trader I spoke with this morning condemned the President’s plan that bans immigrant entry into the U.S. from seven Muslim-majority countries. He said, President Trumps’ “impulse governing” is a very dangerous way to conduct business and has many people across the pond very concerned. He also said that watching the protests here in the states and seeing how divided this country is could give him a sell signal in equities and a buy signal in the precious metals arena.

Traders will be watching the news from the FOMC meeting scheduled Tuesday and Wednesday this week. The CME Watch tool predictor only gives a chance of a rate hike at 4 percent at this meeting.

One hundred seventy eight thousand ounces were put into the Gold ETF on Friday possibly starting to trend higher once again giving the price of gold a boost. Silver also joined the plus ranks adding almost 750,000 ounces, which is a very small addition to the ETF funds currently holding 645 million ounces.

The dollar index is up slightly this morning and ten-year treasury yields off a bit. Kind of a mixed bag there.

The financial advisors I spoke with this morning say business is very quiet, except for the ones who have fee based businesses, who say phone calls from clients with questions are starting to increase. I believe one would view this as a possible profit taking event especially if the Dow retreats below the 20,000 level.

Have a wonderful Monday.


Lower Gold and Silver In Overnight Asian Trading

The Market Gage - Dillon Gage's Precious Metals Newsletter

Lower gold and silver prices seen in overnight Asian trading after seeing the dollar strengthen. Since then the dollar reversed course and now is in negative territory, but the price of gold seems to be ignoring the decline in the dollar and is sticking right in the middle of the overnight
trading range.

Some Wall Street Gold traders I spoke with morning continue to hold their short positions in both gold and silver as they believe the trend is their friend. They indicated that they expect the trend will be short lived, so as soon as we bottom out they will put their stop loss positions into place.

The gold ETF outflows continue for the fourth day in a row. This seems to be fund liquidation as I could not find any financial advisor that had any retail ETF liquidations to speak of.

As all eyes seem to be on what the president is proposing every day I wanted to share a personal story and equate it to what is going on in Washington.

I remember not too long ago when my daughter started college and applied for a credit card to use to buy books and food at school. Sure enough, since she didn’t have any previous credit she was turned down. So like any good (but not so smart dad) I co-signed the application and we got her a card. Like any normal college student, it didn’t take long for her to build up a balance of $5,000 and hit her credit limit. Since she is daddy’s little girl and couldn’t be left without a way to eat, we applied for a higher credit limit. One never knows what expenses might arise, poor baby.

The reason I’m sharing this story with you is the exact same thing is being proposed by the Trump
administration. It’s called “expenditures.” The definition of expenditures is “the action of spending funds.” Sound familiar?

So, let’s look at the president’s planned expenditures and how dangerous they could become.

What will the cost be for the planned infrastructure proposal? Democrats say one trillion. The President didn’t comment, but who can argue that it isn’t going to be cheap. Next “THE WALL.” Senate Majority Leader Mitch McConnell said he estimates the cost for the American taxpayer is between 12 and 15 billion dollars. Does anyone really believe that Mexico is going to pay for it? Next “Obama Care.” I don’t think anyone knows what the cost to revamp this insurance plan will be for the American taxpayer. And what will be the cost for each state once the new plan is put into place? Billions, trillions, who knows?

Now let’s look at another type of expenditure: tax cuts…both corporate and individual. I’m sure you are asking yourself how are tax cuts an expenditure? Well if they change the tax code that’s less money coming into the nation’s coffers. So I consider that plan a cost and an expenditure.

So let’s tie this all together. Is President Trump’s plan any different than my daughter’s credit card plan? In the end, Daddy’s on the hook and will end up paying the bill. And yes in the end, “you” the tax payer will be paying the bill.

All of what I shared with you this morning will, over the long haul, have a direct impact on the price of gold. It won’t be today or maybe tomorrow but it’s around the corner. Runaway government spending always has an impact on the price of gold.

I have only one question left if I may be so bold: Mister President, “What’s in “YOUR” wallet?

Have a wonderful Friday.

Disclaimer: This editorial has been prepared by Walter Pehowich of Dillon Gage Metals. This document is for information and thought-provoking purposes only and does not purport to predict or forecast actual results. It is not, and should not be regarded as investment advice or as a recommendation regarding any particular security, commodity or course of action. Opinions expressed herein are current opinions as of the date appearing in this editorial only and are subject to change without notice and cannot be attributable to Dillon Gage. Reasonable people may disagree about the opinions expressed herein. In the event any of the assumptions used herein do not come to fruition, results are likely to vary substantially. All investments entail risks. There is no guarantee that investment strategies will achieve the desired results under all market conditions and each investor should evaluate its ability to invest for a long term especially during periods of a market downturn. No part of this editorial may be reproduced in any manner, in whole or in part, without the prior written permission of Dillon Gage Metals. This information is provided with the understanding that with respect to the opinions provided herein, that you will make your own independent decision with respect to any course of action in connection herewith and as to whether such course of action is appropriate or proper based on your own judgment, and that you are capable of understanding and assessing the merits of a course of action. You may not rely on the statements contained herein. Dillon Gage Metals shall not have any liability for any damages of any kind whatsoever relating to this editorial. You should consult your advisors with respect to these areas. By posting this editorial, you acknowledge, understand and accept this disclaimer.


American Eagle Sales as of 1/26/17

U.S. Mint Year to Date Sales of Silver and Gold American Eagles

The following chart includes the year to date totals for 2017 from the U.S. Mint as of 5pm on January 26th.

Gold
Coin Sales in oz. /#coins + from 1/1/2017
One oz.
75,000
75,000
75,000
75,000
Half oz.
9,000
18,000
9.000
18,000
Quarter oz.
9,000
36,000
9.000
36,000
Tenth oz.
11,500
115,000
11,500
115,000
Total
104,500
244,000
104,500
244,000
Silver
Coin Sales in oz. /#coins + from 1/1/2017
One oz.
4,897,500
4,897,500
4,897,500
4,897,500

Dillon Gage Metals Opens Singapore Office

Dillon Gage Asia in Singapore
Expanding its global footprint to serve the Asian market

ADDISON, TX (January 26, 2017) – Dillon Gage Metals, an international precious metals wholesaler, announces the opening of a Singapore-based office to further their business interests in the buying, selling and trading of physical precious metals on a global stage. The newly formed entity will be known as Dillon Gage Asia, a.k.a. Dillon Gage Asia Private Ltd.
Continue reading “Dillon Gage Metals Opens Singapore Office” »


Stock Market Crossing 20,000 Hits Precious Metals

The Market Gage - Dillon Gage's Precious Metals Newsletter

Today all eyes on the Dow 20,000 level as all four metals taking it on the chin. What a difference a day makes, Palladium yesterday reaching a new high for 2017 and today we see Palladium doing a complete reversal down $40 dollars at the time of this report. Both Gold and Silver breaking thru key support levels.

As equities take all the headlines, profit taking and new short positions by Wall Street gold traders are taking hold. Most gold traders I spoke with this morning see this as a temporary decline in precious metal prices but they also said they will be trading the trend until it stops setting up short positions across the board.

Meanwhile, the question that is on many minds around the world is: Will President Trump’s stance on “America first” be the beginning of a trade war with the rest of the world? (Quickly followed in our industry with the question: And how would this affect gold?)

One word comes to mind with this approach and its “protectionism.” The word “PROTECTIONISM” is defined as the theory or practice of shielding a countries domestic industries from foreign competition by taxing imports.

The question on my mind, will this approach isolate the U S from the rest of the world from trading with us? Ok, I get it on job creation, sounds like a solid plan, but forcing companies to produce products here in my mind has the word “inflation” all over it.

President Trump has been saying all along that the dollar is too strong. As a person in the Gold industry, that’s music to my ears: Lower dollar, higher gold prices.

The president is talking about lowering corporate taxes to 15 to 20 percent and helping middleclass America with a tax break. Most everyone’s cheering, they like the idea, but many were cheering Bernie Sanders with his socialistic platform too.

So once again I’m screaming: what about our country’s debt? Is anyone listening? Is this the beginning of cutting Social Security benefits and eliminating Medicare as some politicians have called for? What will be the cost to America s tax payers to replace Obama Care? How can the country survive with Trump’s plan to spend billions on infrastructure. Where is all the money coming from?

Both a Socialist policy and a protectionist policy has to be paid by someone. In the end it’s the tax payer that will be left holding the bag.

Let’s not forget why these companies shipped job overseas in the first place. Cheaper labor, period! With many people demanding higher wages, doesn’t this increase costs to do business in the U.S. and eliminate jobs? Am I missing something?

And now we come to these policies and…gold.

The bottom line is, if the president continues this America First policy, it looks like the dollar is destined to head south in a big way and gold will be the benefactor of the move. So in turn, I expect the Fed to be all talk and no action as they were in 2016 giving the price of gold a strong foundation for higher prices this year. Don’t forget, according to the CME FED Fund watch tool prediction, there isn’t one Fed meeting in 2017 that has a probability of a rate hike over 47 percent. Just think, if everything proposed by this administration would stimulate the economy don’t you think the odds of future rate hikes would be much higher?

Believe me, this is not a political comment nor do I want to choose sides on this issue. It’s just my attempt to bring out the facts and I leave it up to you to make your own assessment of things to come and how it will impact our markets.

Have a wonderful Wednesday.

Disclaimer: This editorial has been prepared by Walter Pehowich of Dillon Gage Metals. This document is for information and thought-provoking purposes only and does not purport to predict or forecast actual results. It is not, and should not be regarded as investment advice or as a recommendation regarding any particular security, commodity or course of action. Opinions expressed herein are current opinions as of the date appearing in this editorial only and are subject to change without notice and cannot be attributable to Dillon Gage. Reasonable people may disagree about the opinions expressed herein. In the event any of the assumptions used herein do not come to fruition, results are likely to vary substantially. All investments entail risks. There is no guarantee that investment strategies will achieve the desired results under all market conditions and each investor should evaluate its ability to invest for a long term especially during periods of a market downturn. No part of this editorial may be reproduced in any manner, in whole or in part, without the prior written permission of Dillon Gage Metals. This information is provided with the understanding that with respect to the opinions provided herein, that you will make your own independent decision with respect to any course of action in connection herewith and as to whether such course of action is appropriate or proper based on your own judgment, and that you are capable of understanding and assessing the merits of a course of action. You may not rely on the statements contained herein. Dillon Gage Metals shall not have any liability for any damages of any kind whatsoever relating to this editorial. You should consult your advisors with respect to these areas. By posting this editorial, you acknowledge, understand and accept this disclaimer.


Gold Stops Short Of Next Resistance Level

The Market Gage - Dillon Gage's Precious Metals Newsletter

At the time of this report, we see gold up ten dollars overnight stopping right at the next level of resistance at $1,219 in the February CME gold contract.

Physical gold demand at a steady pace in the Far East is helping the price build a base above the $1,200 dollar level.

Some equity advisors I spoke with this morning indicate that their clients are getting a little nervous about their investments as they see the Democrats doing whatever they can to derail President Trump’s first one hundred day agenda.

Senate Minority leader Chuck Schumer said over the weekend that Trump’s cabinet nominees have values that are inconsistent with those of the man who nominated them. Nonetheless the President plans to stay on track and ignore the rhetoric, signing an executive order removing the U.S. from the Trans-Pacific Partnership. He indicated he will start individual trade negotiations with countries in the Partnership on a one-on-one basis.

Some Wall Street gold traders I spoke with this morning have indicated that they are disappointed that gold has not broken thru the $1,220 level and that they will stop themselves out of their current long gold position at the first sign of any weakness in the price. If that’s the case, I guess we have seen the highs for the day already met. Silver demand in the Far East and in Europe is very quiet as investors ponder the future direction of the market.

Overall both Gold and Silver are range bound for the time being as expressed by my technical gurus this morning. Charts not revealing any patterns to talk about, so we wait to hear any news stories that can affect precious metal prices.

Have a wonderful Monday.

Disclaimer: This editorial has been prepared by Walter Pehowich of Dillon Gage Metals. This document is for information and thought-provoking purposes only and does not purport to predict or forecast actual results. It is not, and should not be regarded as investment advice or as a recommendation regarding any particular security, commodity or course of action. Opinions expressed herein are current opinions as of the date appearing in this editorial only and are subject to change without notice and cannot be attributable to Dillon Gage. Reasonable people may disagree about the opinions expressed herein. In the event any of the assumptions used herein do not come to fruition, results are likely to vary substantially. All investments entail risks. There is no guarantee that investment strategies will achieve the desired results under all market conditions and each investor should evaluate its ability to invest for a long term especially during periods of a market downturn. No part of this editorial may be reproduced in any manner, in whole or in part, without the prior written permission of Dillon Gage Metals. This information is provided with the understanding that with respect to the opinions provided herein, that you will make your own independent decision with respect to any course of action in connection herewith and as to whether such course of action is appropriate or proper based on your own judgment, and that you are capable of understanding and assessing the merits of a course of action. You may not rely on the statements contained herein. Dillon Gage Metals shall not have any liability for any damages of any kind whatsoever relating to this editorial. You should consult your advisors with respect to these areas. By posting this editorial, you acknowledge, understand and accept this disclaimer.


Looking Back at Gold and The White House

As we start another Presidential Inauguration Day, it seems like a good time to look back at how gold has reacted to past presidents, at least since the restrictions on owning gold were lifted at the beginning of 1975, under Pres. Nixon.

The chart below shows the average price of gold every year since Pres. Carter’s first year in 1977.  (Click on chart for larger view) The blue fields indicate years when Democrats were in the White House and the red fields show the Republican years. The black bars show the first inaugural year of each President.

In analyzing the chart, we find that:

  • The Democratic years have generally tended to be better years for gold (particularly the Carter and Obama terms)
  • The first year of NON-Incumbent Democratic presidents (1993 and 2009) have tended to support gold while the first year of NON-Incumbent Republicans (1981, 1989, 2001) have been less supportive.

However, there really isn’t a STRONG story to pull from this data. The wisest conclusion to draw would be that gold’s behavior is not strongly tied to Presidential terms. The stronger drivers would be the nation’s overall economic strength and global unrest (thus U.S. stagnation paired with the rise of Khomeni in Iran sparked gold’s leap at the end of Pres. Carter’s term).

The one takeaway from this analysis for investors to keep in mind is that normal post-election years (such as 2017) tend to be the weakest year in the presidential election cycle, however, as many have noted, President elect Trump won the White House by promising to overturn the norms. Couple the uncertainties over Mr. Trump’s exact policies and how they will affect the national debt with the large, looming questions over the EU and its immigrant crisis and you have a wealth of factors that historically buoy the yellow metal.

Disclaimer: This editorial has been prepared by Walter Pehowich of Dillon Gage Metals. This document is for information and thought-provoking purposes only and does not purport to predict or forecast actual results. It is not, and should not be regarded as investment advice or as a recommendation regarding any particular security, commodity or course of action. Opinions expressed herein are current opinions as of the date appearing in this editorial only and are subject to change without notice and cannot be attributable to Dillon Gage. Reasonable people may disagree about the opinions expressed herein. In the event any of the assumptions used herein do not come to fruition, results are likely to vary substantially. All investments entail risks. There is no guarantee that investment strategies will achieve the desired results under all market conditions and each investor should evaluate its ability to invest for a long term especially during periods of a market downturn. No part of this editorial may be reproduced in any manner, in whole or in part, without the prior written permission of Dillon Gage Metals. This information is provided with the understanding that with respect to the opinions provided herein, that you will make your own independent decision with respect to any course of action in connection herewith and as to whether such course of action is appropriate or proper based on your own judgment, and that you are capable of understanding and assessing the merits of a course of action. You may not rely on the statements contained herein. Dillon Gage Metals shall not have any liability for any damages of any kind whatsoever relating to this editorial. You should consult your advisors with respect to these areas. By posting this editorial, you acknowledge, understand and accept this disclaimer.


America’s Debt Load And The Price Of Gold

The Market Gage - Dillon Gage's Precious Metals Newsletter

Just two days away from the inauguration and all the focus is on President Elect Trump’s plan to create jobs, grow the economy and cut corporate and individual taxes to stimulate the economy. Also he says he’s working on a infrastructure plan to rebuild America.

And let’s not forget the Federal Reserve has called for three interest rate hikes in 2017.

Oh and one more thing: Revamping Obamacare.

Sounds like a plan to Make America Great again…or is it?

One word comes to mind and I’m compelled to put it in capitals letters.

“COST”

Our country is already running a budget deficit of over 500 billion dollars a year. Anyone care? Seems not.

If the Federal Reserve raises interest rates like they claim they will in 2017, this will
add hundreds of billions of dollars in additional costs that Congress must cover in this year’s annual budget.

One way to turn things around will be for Congress to drastically cut Social Security, Medicare and all other entitlements. What’s the odds of that happening? ZERO…

Oh by the way, as I’m writing this comment, President Elect Trump is calling for a weaker U.S. Dollar. He claims it is way too high. In a Wall Street article the other day he blamed this is in part on China holding down its currency and added that “our companies can’t compete with them now, because our currency is too strong. And it’s killing us.” Tuesday morning, one of Trump’s advisors speaking at the world conference in Davos said, “We must be careful of a rising dollar.”

So when you look at all I mentioned above, does any “one” word come to mind? I’ll keep you in the dark until I build up my case. (No scrolling down for the answer) Taking the information from above, here are the key formulas to find the “one”.

  • Lower dollar = ?
  • Lack of positive economic data that would give Fed the reason to raise rates = ?
  • The country’s debt spiraling out of control = ?
  • Possible trade war with China = ?

OK here’s the word: “GOLD”

Every topic I mentioned has the ability to fuel the price of gold. And if this all comes into play, I for one would expect much higher prices in the near future.

What’s in your vault?

Have a wonderful Wednesday.

Disclaimer: This editorial has been prepared by Walter Pehowich of Dillon Gage Metals. This document is for information and thought-provoking purposes only and does not purport to predict or forecast actual results. It is not, and should not be regarded as investment advice or as a recommendation regarding any particular security, commodity or course of action. Opinions expressed herein are current opinions as of the date appearing in this editorial only and are subject to change without notice and cannot be attributable to Dillon Gage. Reasonable people may disagree about the opinions expressed herein. In the event any of the assumptions used herein do not come to fruition, results are likely to vary substantially. All investments entail risks. There is no guarantee that investment strategies will achieve the desired results under all market conditions and each investor should evaluate its ability to invest for a long term especially during periods of a market downturn. No part of this editorial may be reproduced in any manner, in whole or in part, without the prior written permission of Dillon Gage Metals. This information is provided with the understanding that with respect to the opinions provided herein, that you will make your own independent decision with respect to any course of action in connection herewith and as to whether such course of action is appropriate or proper based on your own judgment, and that you are capable of understanding and assessing the merits of a course of action. You may not rely on the statements contained herein. Dillon Gage Metals shall not have any liability for any damages of any kind whatsoever relating to this editorial. You should consult your advisors with respect to these areas. By posting this editorial, you acknowledge, understand and accept this disclaimer.


Platinum Philharmonic 2017

Austrian Philharmonic Platinum

This is the second year that the Austrian Mint has struck a platinum bullion coin. For more details, click here.


Some Headlines to Consider To Start The Precious Metals Trading Day

The Market Gage - Dillon Gage's Precious Metals Newsletter

Geopolitical risks, a much weaker dollar and falling treasury yields giving gold and silver a boost this morning.

Some Street gold traders in early this morning after a three day holiday jumping on the bandwagon buying gold.

Far east physical demand overnight as reported by one gold trader I spoke to also fueling the fire.

All awaiting a speech by British Prime Minster Theresa May on plans for a “hard Brexit” that should support a rally in the metals to continue. The Prime Minster also indicated you will not see a half in, half out exit from the European Union.

At the world economic Forum in Davos, some economists have indicated that a trade war between the United States and China are the biggest threats to the global economy.

Tomorrow and Thursday we will have the opportunity to hear from Fed Chairwoman Janet Yellen as she has two speeches planed.

Have a wonderful Tuesday.

Disclaimer: This editorial has been prepared by Walter Pehowich of Dillon Gage Metals. This document is for information and thought-provoking purposes only and does not purport to predict or forecast actual results. It is not, and should not be regarded as investment advice or as a recommendation regarding any particular security, commodity or course of action. Opinions expressed herein are current opinions as of the date appearing in this editorial only and are subject to change without notice and cannot be attributable to Dillon Gage. Reasonable people may disagree about the opinions expressed herein. In the event any of the assumptions used herein do not come to fruition, results are likely to vary substantially. All investments entail risks. There is no guarantee that investment strategies will achieve the desired results under all market conditions and each investor should evaluate its ability to invest for a long term especially during periods of a market downturn. No part of this editorial may be reproduced in any manner, in whole or in part, without the prior written permission of Dillon Gage Metals. This information is provided with the understanding that with respect to the opinions provided herein, that you will make your own independent decision with respect to any course of action in connection herewith and as to whether such course of action is appropriate or proper based on your own judgment, and that you are capable of understanding and assessing the merits of a course of action. You may not rely on the statements contained herein. Dillon Gage Metals shall not have any liability for any damages of any kind whatsoever relating to this editorial. You should consult your advisors with respect to these areas. By posting this editorial, you acknowledge, understand and accept this disclaimer.


Gold Hanging Tough On Far East Activity

The Market Gage - Dillon Gage's Precious Metals Newsletter

A quiet trading session expected here in the States as we observe a Federal Holiday celebrating the life of Martin Luther King, Jr.

Overnight across the pond and in the Far East they saw an active trading session in Precious Metals with good trading activity in CME futures. At the time of this report we see over 90,000 contracts exchanged hands in the February gold contract.

Stateside, rhetoric abounded over the weekend between President elect Trump and the Democrats as one member of the Democratic party, Congressman John Lewis, said he believes President elect Trump “is not a legitimate president” and that he (Lewis) will not attend the inauguration on Friday. Now 18 other members of the Democratic party say they will not attend the inauguration.

I expect the unpleasant exchanges to continue which in turn will divide this nation further apart. This bickering between parties will not help our country solve its problems. I believe it’s at a critical stage. It is my hope it doesn’t get out of control.

Back to the markets. One Far East Gold Trader I spoke with overnight said some investors there are getting nervous at what they call “the bullying comments” made by President elect Trump regarding other nations and companies, indicating that he’s the boss and the whole world needs to listen to him. The trader said he expects this will cause investors there to seek a safe haven for their investments which he expects will give the price of gold a boost.

I would be remiss if I didn’t acknowledge today’s holiday. Maybe we all should stop and think about what Martin Luther King Jr. stood for and all take up his stance for peace, equality and justice for all Americans. There should be no place in this great country for anyone to hate his neighbor whatever the color of his skin or religious belief.

So, as our representatives in Washington act like children, we the people must remind them they are there to represent us not divide us as a nation and make the calls to our congressmen and Senators to stop the bickering and act like responsible adults.

Enough is enough.

Have a wonderful Monday.

Disclaimer: This editorial has been prepared by Walter Pehowich of Dillon Gage Metals. This document is for information and thought-provoking purposes only and does not purport to predict or forecast actual results. It is not, and should not be regarded as investment advice or as a recommendation regarding any particular security, commodity or course of action. Opinions expressed herein are current opinions as of the date appearing in this editorial only and are subject to change without notice and cannot be attributable to Dillon Gage. Reasonable people may disagree about the opinions expressed herein. In the event any of the assumptions used herein do not come to fruition, results are likely to vary substantially. All investments entail risks. There is no guarantee that investment strategies will achieve the desired results under all market conditions and each investor should evaluate its ability to invest for a long term especially during periods of a market downturn. No part of this editorial may be reproduced in any manner, in whole or in part, without the prior written permission of Dillon Gage Metals. This information is provided with the understanding that with respect to the opinions provided herein, that you will make your own independent decision with respect to any course of action in connection herewith and as to whether such course of action is appropriate or proper based on your own judgment, and that you are capable of understanding and assessing the merits of a course of action. You may not rely on the statements contained herein. Dillon Gage Metals shall not have any liability for any damages of any kind whatsoever relating to this editorial. You should consult your advisors with respect to these areas. By posting this editorial, you acknowledge, understand and accept this disclaimer.


Expectations for Silver in 2017

The Market Gage - Dillon Gage's Precious Metals Newsletter

What do we expect to see in the silver market in 2017? As you know there are so many factors that have an impact on all precious metal prices including the Dollar, U.S. Treasury Yields and developments over the pond. Today I will discuss a few of these factors and offer a timeline and price range for when I believe the silver market will heat up and cool down. This analysis is totally based on a number of factors I expect to take place this year which should drive the value of silver higher and lower throughout 2017.

Let me first list some of the indicators that The Wall Street Gold and Silver traders will be watching as well as some Wall Street economists and analysts.

Based on the last Fed meeting in December the Fed governors have expressed they expect 3 rate hikes in 2017. I disagree and here is one of the reasons why. The CME Market Watch Tool is published every day predicting the odds by the Street, or market participants as they like to be called, indicating the following odds of rate hike at each Fed meeting in 2017 and they are:

  • Feb chance of a rate only 3 percent
  • Mar 23.8 percent
  • May 33.8 percent
  • Jun 46.3 percent
  • Jul 44 percent
  • Sep 38.5 percent
  • Nov 34.4 percent
  • Dec 24.2 percent

As you can see in any month the chance of a rate hike is no higher than 46.3 percent. Looking at these numbers one would think that any rate hike would be in question and solely dependent on positive economic data.

Ok, next let’s look at the first 100 days of the Trump administration. Many Democrats as well as some Republicans are questioning President elect Trump’s plans for spending on infrastructure and at the same time his plans for cutting corporate and individual tax rates. Where will this take our country’s debt as AGAIN this is not being addressed as it should be.

As we have seen over the last couple of days the Democrats on the Hill are digging in their heels to do whatever it takes to derail any agenda President Elect Trump puts on the table.

As I indicated in one of my recent comments, I expect someone or some country around the Globe will test his resolve and what he is made of that as soon as the President elect is sworn in.

Next, let’s look across the pond.

The British Prime Minister May had this to say about the EU recently, “We are leaving, we are coming out, we are not going to be a member of the EU any longer. We will have control of our borders, control of our laws, but we still want the best possible deal for UK companies to trade with and operate within the European Union and also European companies to trade and operate with in the UK.”

Meanwhile, the French National front leader Marine Le Pen said if elected she will put forth a movement to have France also exit the EU. Currently she is considered an outsider to win the election on April 23rd; but if she can get foreign bank financing for her campaign she claims her anti–immigrant exit the EU platform can get some traction.

The Chancellor of Germany Angela Merkel has been under extreme criticism for her decision to open the boarders of the masses of immigrants. Back in September 2016 at the German State elections her party look a blow in the election results which she agreed this was total he fault because of her decision to open the borders.

The reason I emphasize the issues facing the UK, France and Germany is that for the European Union to stay intact, it cannot accept one more defecting country without experiencing a total collapse. It seems to me that only countries not threating to leave are the ones looking for a bail out. These are very serious concerns for the European Central Bank with Italy’s banking system hanging on a string (its most recent bailout of the world’s oldest bank Monte Dei Paschi is keeping them afloat for at least a couple more months). One must remember the majority of Italy’s bonds are held outside the country. One must also remember that being in a global economy it only takes one country to push the domino tile over to effect the world’s banking system.

I can go on with other issues like the direction of the dollar (lower) and what I expect of US Treasury yields, that can affect the price the price of Gold and Silver in 2017, but I’ll spare you a new eye exam. So here is what I expect for the price of silver in 2017.(wiping the sweat off my brow)

I have expected a slow start to the precious metal markets in 2017 as President Elect Trump’s good intentions get derailed and the equity markets lose their love affair with him. I expect our markets to pick up steam in the second quarter this year as we will see no significant U.S. growth to talk about. My real concern is Europe. This area of the world will create the catalyst for the metals to go higher in 2017 and handcuff the Federal Reserve Bank here from raising rates. I expect gold to be more exciting as I expect news out to the EU to deteriorate. Nonetheless I expect both metals to be trading higher at the end of 2017, gold having a better time of it.

Here’s something I never tried or for that matter have I seen anyone else try to predict a month by month analysis of the price of silver in 2017.

  • Jan higher
  • Feb flat to slightly lower
  • Mar flat to slightly higher
  • Apr higher
  • May higher
  • Jun higher
  • Jul lower
  • Aug lower
  • Sep flat
  • Oct higher
  • Nov higher
  • Dec flat

Trading range for silver in 2017. The low in silver for 2017 has been met already at $ 15.90 on Jan 3rd. Two scenarios to consider: If President elect Trump is successful in gaining support for his infrastructure plan (since silver can be considered an industrial metal)the high for silver in 2017 will be $ 18.50. Silver Eagle production I expect to be 42 million. Otherwise a high of $ 18.13 and a production of 38 million Silver Eagles.

One thing I KNOW I can predict. It won’t be dull.

Have a great weekend.

Disclaimer: This editorial has been prepared by Walter Pehowich of Dillon Gage Metals. This document is for information and thought-provoking purposes only and does not purport to predict or forecast actual results. It is not, and should not be regarded as investment advice or as a recommendation regarding any particular security, commodity or course of action. Opinions expressed herein are current opinions as of the date appearing in this editorial only and are subject to change without notice and cannot be attributable to Dillon Gage. Reasonable people may disagree about the opinions expressed herein. In the event any of the assumptions used herein do not come to fruition, results are likely to vary substantially. All investments entail risks. There is no guarantee that investment strategies will achieve the desired results under all market conditions and each investor should evaluate its ability to invest for a long term especially during periods of a market downturn. No part of this editorial may be reproduced in any manner, in whole or in part, without the prior written permission of Dillon Gage Metals. This information is provided with the understanding that with respect to the opinions provided herein, that you will make your own independent decision with respect to any course of action in connection herewith and as to whether such course of action is appropriate or proper based on your own judgment, and that you are capable of understanding and assessing the merits of a course of action. You may not rely on the statements contained herein. Dillon Gage Metals shall not have any liability for any damages of any kind whatsoever relating to this editorial. You should consult your advisors with respect to these areas. By posting this editorial, you acknowledge, understand and accept this disclaimer.


Gold Eagle 2017

American Gold Eagle - 2017

Ronald Reagan started the Gold Eagle program in 1985. It is one-Troy-ounce gold content minted in newly mined U.S. gold. For more information, click here.


Gold and Silver Asleep Overnight

The Market Gage - Dillon Gage's Precious Metals Newsletter

Gold and Silver seemingly took sleeping pills overnight as they are locked in a trading range between current support and resistance levels. Nonetheless we see both CME open interest figures rise and Gold ETF increases overnight.

Counter forces: slightly stronger U.S. Dollar and softer bond yields are keeping the price of gold and silver locked in for the time being.

A lot of folks watching the action in the relationship between the U.S. Dollar and the British Pound yesterday as the pound reached a 31-year low against the dollar. This comes on the heels of Prime Minister Theresa May‘s comments that the UK is likely to leave the single market in a so-called “hard” Brexit. She also said her country can’t keep “bits of the EU” and that the British Pound “isn’t safe from bears until we know what will replace the single market.”

According to my friends over the pond, the physical market there seems to be taking the same sleeping pill as both buyers and sellers are absent from the market.

Part of the problem, both here and in Europe, is the lack of any substantial news hitting the wires to give the price of our metals a kick in any direction.

Same technical levels are intact as the next level of resistance is the February gold contract seen in the $1,195 area and the new level of support is now $1,182. My technical buddies claim that with no news to talk of they expect that level of support at $ 1182 to be challenged today before we head any higher. They also said they expect that the price of silver is more vulnerable to the downside than gold at the moment.

Have a wonderful Wednesday.

Disclaimer: This editorial has been prepared by Walter Pehowich of Dillon Gage Metals. This document is for information and thought-provoking purposes only and does not purport to predict or forecast actual results. It is not, and should not be regarded as investment advice or as a recommendation regarding any particular security, commodity or course of action. Opinions expressed herein are current opinions as of the date appearing in this editorial only and are subject to change without notice and cannot be attributable to Dillon Gage. Reasonable people may disagree about the opinions expressed herein. In the event any of the assumptions used herein do not come to fruition, results are likely to vary substantially. All investments entail risks. There is no guarantee that investment strategies will achieve the desired results under all market conditions and each investor should evaluate its ability to invest for a long term especially during periods of a market downturn. No part of this editorial may be reproduced in any manner, in whole or in part, without the prior written permission of Dillon Gage Metals. This information is provided with the understanding that with respect to the opinions provided herein, that you will make your own independent decision with respect to any course of action in connection herewith and as to whether such course of action is appropriate or proper based on your own judgment, and that you are capable of understanding and assessing the merits of a course of action. You may not rely on the statements contained herein. Dillon Gage Metals shall not have any liability for any damages of any kind whatsoever relating to this editorial. You should consult your advisors with respect to these areas. By posting this editorial, you acknowledge, understand and accept this disclaimer.


Gold Higher This Morning Despite Strong Dollar

The Market Gage - Dillon Gage's Precious Metals Newsletter

Gold higher this morning even with a stronger dollar. Far East physical buying continues to be the reason for the continued rally in the price of gold. Gold kilo bar consumption is the headline in the Far East as orders from here in the States pick up steam.

The yield in 10-year treasuries softer here in the U.S. and bond yields across Europe also lower.

The British Pound trading lower versus the dollar this morning over news from a weekend interview with Prime Minster May where she said, “We are leaving , we are coming out, we are not going to be a member of the EU any longer. We will have control of our borders , control of our laws but we still want the best possible deal for UK companies to trade with and operate within the European Union and also European companies to trade and operate with in the UK.”

You can bet that Germany and France will be watching closely how the exit proceeds as, if it goes well, one can assume public pressure on their government officials will escalate to follow the path of the UK.

Today Boston’s Fed President Eric Rosengren and Atlanta’s Dennis Lockhart are due to speak . I always feel the need to tighten my seatbelt as any surprise comment can affect the price of gold in a big way.

I’m still holding my position that there will NOT be three rate hikes in 2017 as I expect more problems from over the pond economically and politically to hand cuff the Fed s here from moving forward increasing rates. Also with the Democrats on the hill digging in their heals for a showdown with President elect Trump to try to derail anything he tries to do in his first 100 days.

 Many Democrats as well as some Republicans are questioning his plans for spending on infrastructure and at the same time his plans for cutting corporate and individual tax rates. Where will this take our countries debt as AGAIN as this is not being addressed as it should be.

All this will give my prediction credibility that the price of gold will be higher on January 1 st .2018 than it was on January 1, 2017.   

Oh one more bit of news. The gold ETF for the third day in a row has seen inflows as some  equity investors take some profits off the table and dip their toes back into gold for the time being as the Dow comes up just short of the magical 20,000 level on Friday.

Also $ 1182 level in the February contract should see some resistance, my charting fiends shared this morning but the real resistance doesn’t come into play until we trade $ 1195 in the February contract.

Have a wonderful Monday.    

 

<p style=“font-family: arial, sans-serif; font-size: 10px;”><b><i>Disclaimer: This editorial has been prepared by Walter Pehowich of Dillon Gage Metals. This document is for information and thought-provoking purposes only and does not purport to predict or forecast actual results. It is not, and should not be regarded as investment advice or as a recommendation regarding any particular security, commodity or course of action. Opinions expressed herein are current opinions as of the date appearing in this editorial only and are subject to change without notice and cannot be attributable to Dillon Gage. Reasonable people may disagree about the opinions expressed herein. In the event any of the assumptions used herein do not come to fruition, results are likely to vary substantially. All investments entail risks. There is no guarantee that investment strategies will achieve the desired results under all market conditions and each investor should evaluate its ability to invest for a long term especially during periods of a market downturn. No part of this editorial may be reproduced in any manner, in whole or in part, without the prior written permission of Dillon Gage Metals. This information is provided with the understanding that with respect to the opinions provided herein, that you will make your own independent decision with respect to any course of action in connection herewith and as to whether such course of action is appropriate or proper based on your own judgment, and that you are capable of understanding and assessing the merits of a course of action. You may not rely on the statements contained herein. Dillon Gage Metals shall not have any liability for any damages of any kind whatsoever relating to this editorial. You should consult your advisors with respect to these areas. By posting this editorial, you acknowledge, understand and accept this disclaimer.</i></b></p>

 

 


Not So Fast…The Market From The “Umpire’s” View

The Market Gage - Dillon Gage's Precious Metals Newsletter

First off…here’s today’s market highlights:

  • For the second day in a row the gold ETFs have seen inflows, but the stronger dollar and bond yields keeping a cap on the price of gold.
  • Disappointing jobs number only up 156,000 after economist expected a number of around 180,000.
  • Some domestic refiners reporting strong kilo bar demand heading to the Far East.
  • On Monday the United States Mint begins sales of 2017 bullion coins.

Now for my assessment of the markets on a cold Friday morning:

I’m calling this one from a baseball umpire’s perspective: I just call them like I see them.

And I’m not taking any sides. Republican or Democrat. Let’s face it, Donald Trump is not the Wizard of Oz and there is no Dorothy that has to go back to Kansas. What I mean by that is, as we approach Jan 20th, all that might have been put in place with good intentions will SLOW down to a government pace and that would have happened no matter who got into the White House. As the pace slows down the arm wrestling over proposals will start are all over again in both houses.

The EU continues to be a hot spot for terrorist attacks, bank bailouts and negative interest rates. With weak economic data from overseas, what positive data can we expect here that could force the FED to raise rates any time soon?

Will the dollar continue to strengthen, along with higher treasury yields? It’s been all too fast of an increase in my opinion, just off of hopes and dreams. So I expect when everything calms down, the equity market gets back to fundamentals, the dollar comes back to earth and Treasury yields soften, then the price of gold will find new levels of support. Commitment of traders indicates that the non-commercial gold traders are holding a long position, the lowest since February 2016. Some Wall Street gold traders indicate they are comfortable selling into any rally. So let the battle begin.

The U.S. debt continues to grow, reforming Obamacare will take some time and so will re-writing regulations to help the “STREET” going forward. Tax breaks, both corporate and individual, will take some time getting on the books.

Infrastructure plans are being developed which will increase government spending. The so-called 20,000 Dow is within reach – or is it? Most financial advisors I spoke with said the smart money didn’t wait for the 20,000 Dow party. They left town before year end. That might have been the reason the Dow stalled just below the magic number.

So as the party and the thank you tour ends, it’s time for our government officials to roll up their sleeves and get back to work, but I’m afraid it might be a little difficult taking off those fancy cufflinks.

Have a wonderful weekend.

Disclaimer: This editorial has been prepared by Walter Pehowich of Dillon Gage Metals. This document is for information and thought-provoking purposes only and does not purport to predict or forecast actual results. It is not, and should not be regarded as investment advice or as a recommendation regarding any particular security, commodity or course of action. Opinions expressed herein are current opinions as of the date appearing in this editorial only and are subject to change without notice and cannot be attributable to Dillon Gage. Reasonable people may disagree about the opinions expressed herein. In the event any of the assumptions used herein do not come to fruition, results are likely to vary substantially. All investments entail risks. There is no guarantee that investment strategies will achieve the desired results under all market conditions and each investor should evaluate its ability to invest for a long term especially during periods of a market downturn. No part of this editorial may be reproduced in any manner, in whole or in part, without the prior written permission of Dillon Gage Metals. This information is provided with the understanding that with respect to the opinions provided herein, that you will make your own independent decision with respect to any course of action in connection herewith and as to whether such course of action is appropriate or proper based on your own judgment, and that you are capable of understanding and assessing the merits of a course of action. You may not rely on the statements contained herein. Dillon Gage Metals shall not have any liability for any damages of any kind whatsoever relating to this editorial. You should consult your advisors with respect to these areas. By posting this editorial, you acknowledge, understand and accept this disclaimer.


SPECIAL EDITION – Weak Dollar Boosts Gold

The Market Gage - Dillon Gage's Precious Metals Newsletter

Weaker dollar and softer 10 year treasury yields gives the price of Gold a boost this morning. At the time of this report February gold was trading just shy of $ 1180 up over $ 14.00 dollars on the day.

As I indicated yesterday, I expected to see for the first time in a long time inflows into the gold ETF and that’s exactly what occurred. So for my friends who I bet a cup of coffee that I would be correct please don’t send me any Dunkin Donut cards. To tell you the truth I’m not really a fan of coffee at all. I just wanted to get some feedback from my readers.

My technical friends are back in full swing and started the year on the right track informing us yesterday that they had seen no immediate resistance levels to speak of and expected gold to rally from yesterday’s levels. Today they expect some resistance in February gold at the $ 1182 level then nothing till $ 1195 in the February contract.

One person asked me yesterday why do we use the most active futures February contract as a level of support and resistance? Most folks use the price of spot gold as an indicator. If you use the current EFP levels one can equate the spot level to the futures. My chart friends prefer the most active futures month for their analysis. Today’s gold EFP level is -40 -60 as an indication.

The Wall Street gold traders I spoke with this morning inform me they have for the most part flattened out their positions and are poised to sell into any strong rally in the yellow metal as they still believe interest rates will continue to rise. Once again I’ll take the other side of that trade and call for a weaker dollar and softer bond yields giving the support the longs will be looking for.

For those who closely follow the CME Watch tool for future interest rate hikes here are the current odds for rake hikes at each Fed meeting.

Feb: 2 percent
Mar: 19 percent
May 29.5 percent
Jun: 48.5 percent
Jul: 45 percent
Sep 38.6 percent
Nov. 34.4 percent
Dec. 23.7 percent

As we can see at the current time there is no month in 2017 with a percentage rate of over 49 percent.

One must expect a fierce battle between the Republicans and Democrats on any proposal put on the table by the Trump
administration. And one would also hope that there could be peace on Capitol Hill. Both parties are still acting like children with President Elect Trump calling Chuck Schumer a clown this morning and Schumer calling the plan to repeal Obamacare “Make America Sick Again.”

In the meantime I expect that with the absence of news this will catapult the dollar to new heights and continued madness by both parties gold will slowly react to no new rate hikes in the cards and head to higher ground.

Now I could still hear my mother saying, “now boys play nice.”

Have a wonderful Thursday.

Disclaimer: This editorial has been prepared by Walter Pehowich of Dillon Gage Metals. This document is for information and thought-provoking purposes only and does not purport to predict or forecast actual results. It is not, and should not be regarded as investment advice or as a recommendation regarding any particular security, commodity or course of action. Opinions expressed herein are current opinions as of the date appearing in this editorial only and are subject to change without notice and cannot be attributable to Dillon Gage. Reasonable people may disagree about the opinions expressed herein. In the event any of the assumptions used herein do not come to fruition, results are likely to vary substantially. All investments entail risks. There is no guarantee that investment strategies will achieve the desired results under all market conditions and each investor should evaluate its ability to invest for a long term especially during periods of a market downturn. No part of this editorial may be reproduced in any manner, in whole or in part, without the prior written permission of Dillon Gage Metals. This information is provided with the understanding that with respect to the opinions provided herein, you will make your own independent decision with respect to any course of action in connection herewith and as to whether such course of action is appropriate or proper based on your own judgment, and that you are capable of understanding and assessing the merits of a course of action. You may not rely on the statements contained herein. Dillon Gage Metals shall not have any liability for any damages of any kind whatsoever relating to this editorial. You should consult your advisors with respect to these areas. By posting this editorial, you acknowledge, understand and accept this disclaimer.


A Crystal Ball Peek into Precious Metals in 2017

The Market Gage conducted a Q & A with Walter Pehowich to gather his predictions for 2017 based on activity and events from 2016.

According to FedWatch, almost 75% of financial analysts do see a rate hike coming in December. How much of a hike? What happens in the first 24 hours and will that reaction set the tone as we head into 2017? Will there be a steady course of incremental increases each time the Fed meets? As we all witnessed and expected, a 25 basis point hike came during the Fed meeting in December. A $30 dollar decline in the gold price occurred right after the announcement. It wasn’t the rate hike that effected the price of gold so much as it was the language that was shared. The Fed Presidents are calling for at least three rate increases in 2017, which have given gold a sell signal. Since the announcement, the market has absorbed the news and the selloff has stopped–as there is no real evidence that three rate hikes are a sure thing. According to the CME Fed Watch tool, it’s not until June 2017 that the odds of another rate hike exceed 50 percent. One must remember that with a new administration, no one knows how the new policies will affect the markets.

With England now out of the EU, will the rest of the member countries exit one by one? If so, what does that do to the global metals market? If France’s far-right National Front leader Marine Le Pen is elected, she promises to take France out of the EU. She is a strong opponent of the EU and has anti-immigrant views. If France does exit the EU, this will leave Germany holding the bag for all the ills of the EU countries’ failing economies. In my opinion, the Fed must watch what is going on over the pond and no matter how enthusiastic this country is on the change of powers here. Problems over there will have a direct impact on future rate increases here in the States.

Do you foresee any particular geopolitical event that could really rock the precious metals market? Perhaps a bold move by Russia on its neighbors? Or more saber rattling by the Chinese in the South China Sea? I expect President elect Trumps’ first hundred days of policy to set the tone. I am concerned that right after the inaugural ceremonies, someone abroad will have the nerve test his resolve to see what he is made of. If this does occur, depending how serious this event is, it could stall his economic plan, thereby giving the price of gold and silver a boost.

Will the Central Banks ease or tighten their monetary policies in 2017? What effect would either outcome have on the precious metals market? Will China’s entry as an IMF currency cause them to begin stockpiling gold reserves to compete with the West? I expect the European Central Bank (ECB) to continue to maintain or further extend its monetary policies in 2017. In the event that other countries vote to exit the EU, I expect this to put tremendous pressure on the ECB. Just think about it–common sense dictates, and one would expect, that only the strong economic countries would want to leave, as the weaker ones will be looking for a bailout. I look to Europe in 2017 to be the catalyst for a rally in the price of gold. Any uncertainties abroad should keep the Feds from any further rate increases here.

Walter’s Take on Gold in 2017

Here is my case for why I believe the precious metal markets will have a slow start in the new year and pick up momentum in the second quarter. First I must admit I am bucking the opinions of many Wall Street Gold traders my technical friends who believe because of the stronger dollar and higher interest rates expected in 2017 the price of gold is a screaming sell at these levels. I disagree. There are many reasons I expect gold to finish 2017 higher than the first day of the year.

First as I did in my first comment of 2016 I said that in 2016 there will be no rate hikes, due to poor economic data and an uncertain presidential election. One might say I wasn’t far off. Well, I expect this year to be no different in the interest rate arena. As I write this comment, the CME FED Watch tool chart (that predicts future rate hikes) shows NO chance of a rate hike at any meeting more than 48 percent. And that’s in June 2017. Why I indicated the second quarter for a move higher is because I believe that during the first 100 days of the Trump presidency the equity market enthusiasm will continue. What May derail it will be activity in Europe. The EU is in political turmoil and things can only deteriorate. First let’s look at Germany, the King country of the European Union. Chancellor Angel Merkel’s political future is in question after her decision to admit into Germany hundreds of thousands of refugees. The political right wing is preparing an offensive to replace the Chancellor. Let’s not forget the Brexit vote and published reports that this year France and the Netherlands will possibly vote to exit the EU. If that happens guess who is left holding the bag for all the EU problems, GERMANY. Italy and Greece continue to need a bailout. How long will this continue until disaster strikes. Remember what I reported a few comments ago that a significate portion of Italy’s debt is held outside their country. Let us not forget that we are intertwined in an global economy and no matter how well the U.S. is doing, the rest of the world has the potential to hurt us economically.

So back to my reason why gold will be higher on December 31, 2017 than it is today. I believe the problems facing Europe will deteriorate in 2016 so much so that many over the pond will see gold as the only safe haven investment. What will happen to the Euro in relationship to the dollar? Not sure I know that answer. What I do believe is that because of the problems Europe is facing, the Fed will have no choice in considering our global economy issues and be handcuffed once again in 2017 from raising rates giving the price of gold a boost along with the strong anticipated physical demand across the pond.

The defense rests your honor.

Disclaimer: This editorial has been prepared by Walter Pehowich of Dillon Gage Metals. This document is for information and thought-provoking purposes only and does not purport to predict or forecast actual results. It is not, and should not be regarded as investment advice or as a recommendation regarding any particular security, commodity or course of action. Opinions expressed herein are current opinions as of the date appearing in this editorial only and are subject to change without notice and cannot be attributable to Dillon Gage. Reasonable people may disagree about the opinions expressed herein. In the event any of the assumptions used herein do not come to fruition, results are likely to vary substantially. All investments entail risks. There is no guarantee that investment strategies will achieve the desired results under all market conditions and each investor should evaluate its ability to invest for a long term especially during periods of a market downturn. No part of this editorial may be reproduced in any manner, in whole or in part, without the prior written permission of Dillon Gage Metals. This information is provided with the understanding that with respect to the opinions provided herein, that you will make your own independent decision with respect to any course of action in connection herewith and as to whether such course of action is appropriate or proper based on your own judgment, and that you are capable of understanding and assessing the merits of a course of action. You may not rely on the statements contained herein. Dillon Gage Metals shall not have any liability for any damages of any kind whatsoever relating to this editorial. You should consult your advisors with respect to these areas. By posting this editorial, you acknowledge, understand and accept this disclaimer.


Gold Rallies Overnight on Far East Buying

The Market Gage - Dillon Gage's Precious Metals Newsletter

Good Far East buying in Gold overnight as one trader put it, “as I expect the honeymoon to be over with Trump and the Republican Party.” One Wall Street gold trader I spoke with this morning said that he had to abandoned his short position in gold overnight after hearing good physical demand was surfacing yesterday and the dollar was weakening.

A strong rally in gold still hitting some pot holes as we still see the continued redemptions in the gold ETFs. Anyone want to bet a cup of coffee that the redemptions in the gold ETFs will stop today?

Technical analysis supports a rally at these levels as resistance is a bit away according to my technical charting friends who are back from an extended holiday.

Check out my predictions/thoughts on where we’re headed in 2017 here.
Have a wonderful Wednesday.

Disclaimer: This editorial has been prepared by Walter Pehowich of Dillon Gage Metals. This document is for information and thought-provoking purposes only and does not purport to predict or forecast actual results. It is not, and should not be regarded as investment advice or as a recommendation regarding any particular security, commodity or course of action. Opinions expressed herein are current opinions as of the date appearing in this editorial only and are subject to change without notice and cannot be attributable to Dillon Gage. Reasonable people may disagree about the opinions expressed herein. In the event any of the assumptions used herein do not come to fruition, results are likely to vary substantially. All investments entail risks. There is no guarantee that investment strategies will achieve the desired results under all market conditions and each investor should evaluate its ability to invest for a long term especially during periods of a market downturn. No part of this editorial may be reproduced in any manner, in whole or in part, without the prior written permission of Dillon Gage Metals. This information is provided with the understanding that with respect to the opinions provided herein, that you will make your own independent decision with respect to any course of action in connection herewith and as to whether such course of action is appropriate or proper based on your own judgment, and that you are capable of understanding and assessing the merits of a course of action. You may not rely on the statements contained herein. Dillon Gage Metals shall not have any liability for any damages of any kind whatsoever relating to this editorial. You should consult your advisors with respect to these areas. By posting this editorial, you acknowledge, understand and accept this disclaimer.


Looking Back at Precious Metals in 2016

The Market Gage conducted a Q & A with Walter Pehowich to determine the high (and low) lights from 2016.

After a lackluster 2015, gold took off in January of 2016 (up 25%). What were the key causes of this rally?In the beginning of 2016, spot gold was trading just below the $1,160 level and the dollar was trading at the 101 level. As the data in the first quarter revealed a languishing economy, the dollar lost ground to other currencies and gold rallied. That first quarter data lacked any good news, keeping the Fed’s hands tied, so it became evident that the December, 2015 rate hike was a one and done event for the time being.

In my first comment in January 2016, I wrote that I expected no rate hikes in 2016. My reasoning was that I expected poor economic news to be the norm and a very uncertain presidential component to be a factor. One must not forget that the Brexit voting results on June 23 gave the price of gold a boost. It wasn’t until July, 2016 when gold reached a high of $1,375, that economic data started to improve increasing the chances of a rate hike. It’s at this point that the gold rally stalled. Moving ahead to the surprise results of the Presidential election, the equity market took off and many retail gold investors sold their ETF holdings in exchange for the hope of four years of strong economic growth under the Trump administration.

Silver soared in 2016, both in coin sales and availability, especially inflow into ETF funds. What kept silver such a firm bet in 2016?  With poor economic data all over the news in the first half 2016 and on-going name calling in the Presidential election, the inflows into the silver ETF continued at a record pace with 2016 seeing an all-time high at almost 675 million ounces. Many financial advisors I spoke with indicated that their retail investors preferred silver over gold because many believed at that time that the price of silver had a better chance of tripling, where gold would struggle to set a new historic high.

What would have been the most advantageous precious metals investment on Jan. 1, 2016?  For the short term investor, it seemed the most popular investment were the ETFs in 2016. For the long term investor, physical gold and silver always trumps (no pun intended ) any other precious metals investment. The reason? In the times we are living in, with terrorism, currency wars and cyber war issues facing many banks and corporations, a hard asset like Gold and Silver is a wise investment to secure a truly balanced portfolio.

Has Dillon Gage Metals seen investor interest in precious metals go up across the board? In broad terms, how did 2016 measure compared to one year ago?Economic uncertainties always bring new clients in the fold. In 2016, we witnessed negative interest rates pop up all over the globe. Italy’s banking problems, Greece’s continued economic crisis, and the Brexit vote all brought in new physical investors to the arena. As it was different here in the States in 2016, the choice investment was the ETF. I view the ETF investor as a short-term investor. To prove my point, right after the election we witnessed the tremendous exiting out of the ETF funds. So, we saw better physical sales overseas and weaker demand here in the States in 2016.

Disclaimer: This editorial has been prepared by Walter Pehowich of Dillon Gage Metals. This document is for information and thought-provoking purposes only and does not purport to predict or forecast actual results. It is not, and should not be regarded as investment advice or as a recommendation regarding any particular security, commodity or course of action. Opinions expressed herein are current opinions as of the date appearing in this editorial only and are subject to change without notice and cannot be attributable to Dillon Gage. Reasonable people may disagree about the opinions expressed herein. In the event any of the assumptions used herein do not come to fruition, results are likely to vary substantially. All investments entail risks. There is no guarantee that investment strategies will achieve the desired results under all market conditions and each investor should evaluate its ability to invest for a long term especially during periods of a market downturn. No part of this editorial may be reproduced in any manner, in whole or in part, without the prior written permission of Dillon Gage Metals. This information is provided with the understanding that with respect to the opinions provided herein, that you will make your own independent decision with respect to any course of action in connection herewith and as to whether such course of action is appropriate or proper based on your own judgment, and that you are capable of understanding and assessing the merits of a course of action. You may not rely on the statements contained herein. Dillon Gage Metals shall not have any liability for any damages of any kind whatsoever relating to this editorial. You should consult your advisors with respect to these areas. By posting this editorial, you acknowledge, understand and accept this disclaimer.


Quiet Heading into 2016’s Last Trading Day

The Market Gage - Dillon Gage's Precious Metals Newsletter

An extremely quiet overnight session in the Far East and Europe as the price of both gold and silver seen virtually unchanged. Very few Gold traders around today and the ones that were are reporting that by noon they will close their books for 2016.

No surprises the gold ETF, overnight saw more redemptions. My Technical charting friends are nowhere to be found today as without any movement in the market place they decided to start their holiday early.

Check out the my look back at 2016…then look for my comment on Wednesday to share our outlook for 2017. Here’s a sneak peek, I expect a slow start to the year and then the precious metals market will heat up in the second quarter. Stay tuned on Wednesday to read why I believe that will happen. In the meantime:

Have a wonderful New Year.

Disclaimer: This editorial has been prepared by Walter Pehowich of Dillon Gage Metals. This document is for information and thought-provoking purposes only and does not purport to predict or forecast actual results. It is not, and should not be regarded as investment advice or as a recommendation regarding any particular security, commodity or course of action. Opinions expressed herein are current opinions as of the date appearing in this editorial only and are subject to change without notice and cannot be attributable to Dillon Gage. Reasonable people may disagree about the opinions expressed herein. In the event any of the assumptions used herein do not come to fruition, results are likely to vary substantially. All investments entail risks. There is no guarantee that investment strategies will achieve the desired results under all market conditions and each investor should evaluate its ability to invest for a long term especially during periods of a market downturn. No part of this editorial may be reproduced in any manner, in whole or in part, without the prior written permission of Dillon Gage Metals. This information is provided with the understanding that with respect to the opinions provided herein, that you will make your own independent decision with respect to any course of action in connection herewith and as to whether such course of action is appropriate or proper based on your own judgment, and that you are capable of understanding and assessing the merits of a course of action. You may not rely on the statements contained herein. Dillon Gage Metals shall not have any liability for any damages of any kind whatsoever relating to this editorial. You should consult your advisors with respect to these areas. By posting this editorial, you acknowledge, understand and accept this disclaimer.


Gold and Silver in Holiday Mode

The Market Gage - Dillon Gage's Precious Metals Newsletter

The precious metals market in holiday vacation mode once again this morning as we see very light volume in Gold and Silver CME Future contracts.

The Gold ETFs still showing outflows this morning as it seems like these redemptions might never end. Thank goodness the other three metals are showing some buying interest in the ETF arena.

A stronger dollar and slightly higher yields in the 10-year keeping a lid on the gold price this morning. An economist I spoke with this morning expects US 4th quarter economic results to be weaker than expected and if that occurs we should see a dollar decline and gold be supported at these levels.

As I reported in the last comment or two, some Wall street traders still position themselves on the short side of the ledger and think silver is much more vulnerable to the downside. I couldn’t contact anyone today as every gold trader seems to be on holiday.

Have a wonderful Wednesday.

Disclaimer: This editorial has been prepared by Walter Pehowich of Dillon Gage Metals. This document is for information and thought-provoking purposes only and does not purport to predict or forecast actual results. It is not, and should not be regarded as investment advice or as a recommendation regarding any particular security, commodity or course of action. Opinions expressed herein are current opinions as of the date appearing in this editorial only and are subject to change without notice and cannot be attributable to Dillon Gage. Reasonable people may disagree about the opinions expressed herein. In the event any of the assumptions used herein do not come to fruition, results are likely to vary substantially. All investments entail risks. There is no guarantee that investment strategies will achieve the desired results under all market conditions and each investor should evaluate its ability to invest for a long term especially during periods of a market downturn. No part of this editorial may be reproduced in any manner, in whole or in part, without the prior written permission of Dillon Gage Metals. This information is provided with the understanding that with respect to the opinions provided herein, that you will make your own independent decision with respect to any course of action in connection herewith and as to whether such course of action is appropriate or proper based on your own judgment, and that you are capable of understanding and assessing the merits of a course of action. You may not rely on the statements contained herein. Dillon Gage Metals shall not have any liability for any damages of any kind whatsoever relating to this editorial. You should consult your advisors with respect to these areas. By posting this editorial, you acknowledge, understand and accept this disclaimer.


Italian Bank Bailout Bears Watching

The Market Gage - Dillon Gage's Precious Metals Newsletter

If you are looking for a catalyst to get the price of gold in rally mode look no further than the Italian banks for help.

Reported by Bloomberg on Wednesday, the Italian banks need at least 52 BILLION Euros to clean up their balance sheets. That figure is much more than the rescue package proposed Monday by the Government.

One bank in particular, Monte Dei Paschi, was bailed out today with an infusion of 20 billion Euros by the Italian government as it failed to secure backing from private investors. The bank indicated it could run out of funds by April if help did not come soon. Established in 1472, Monte Dei Paschi, according to some historians, is the oldest bank in the world. Just as a reminder, back in July this bank failed a stress test miserably with a significant amount of uncollectable loans. And things just kept getting worse day by day. There are other banks in Italy with similar problems.

One must realize that Italy is the eighth largest economy in the world and has already issued the third largest amount of sovereign bonds. My worry is that a large amount of Italy’s sovereign bonds are held outside of Italy.

So as we have all seemed to be transfixed on the equity markets here in the U.S. and the promise of all the wonderful proposals by the Trump transition team, one should not be blinded to what’s going on in the rest of the world. We must watch VERY closely what’s occurring in the European community, because let us NOT forget, this is a global economy and one bank and one county has the potential to cause a big problem for investors and banks holding their paper.

About a year ago in my January 2, 2016 comment I said the Fed president’s plan for 4 rate hikes in 2016 would never happen; I will take the same stance this year saying three rate hikes are out of the question, because I believe there are SO many issues facing the European community from Brexit to terrorism to the potential bank failures (especially in Italy and possibly Greece). These problems can affect our economy, so I can’t get too excited that the new administration has all the answers.

Even with great intentions, outside influences can derail any good plan.

Now to more important things in our lives. Let me and the Dillon Gage family wish all of you the most wonderful holiday ever. And remember that the most important word the whole world needs to adopt is “PEACE.”

Have a wonderful Friday.

Disclaimer: This editorial has been prepared by Walter Pehowich of Dillon Gage Metals. This document is for information and thought-provoking purposes only and does not purport to predict or forecast actual results. It is not, and should not be regarded as investment advice or as a recommendation regarding any particular security, commodity or course of action. Opinions expressed herein are current opinions as of the date appearing in this editorial only and are subject to change without notice and cannot be attributable to Dillon Gage. Reasonable people may disagree about the opinions expressed herein. In the event any of the assumptions used herein do not come to fruition, results are likely to vary substantially. All investments entail risks. There is no guarantee that investment strategies will achieve the desired results under all market conditions and each investor should evaluate its ability to invest for a long term especially during periods of a market downturn. No part of this editorial may be reproduced in any manner, in whole or in part, without the prior written permission of Dillon Gage Metals. This information is provided with the understanding that with respect to the opinions provided herein, that you will make your own independent decision with respect to any course of action in connection herewith and as to whether such course of action is appropriate or proper based on your own judgment, and that you are capable of understanding and assessing the merits of a course of action. You may not rely on the statements contained herein. Dillon Gage Metals shall not have any liability for any damages of any kind whatsoever relating to this editorial. You should consult your advisors with respect to these areas. By posting this editorial, you acknowledge, understand and accept this disclaimer.


Weaker Dollar Gives Gold a Hand

The Market Gage - Dillon Gage's Precious Metals Newsletter

A weaker dollar and lower 10-year bond yields across the globe helping gold stay in positive territory.

The Gold ETF continues to see redemptions as financial advisors are reporting that most clients believe the equity market still has upside potential when and if the Dow reaches 20,000.

Wall Street gold traders still tell me they are content by staying short, as they believe our support levels of $1,132 in the February gold futures contract and $16.06 in the March silver futures contract will be a distant memory as we start 2017.

Kudos to my technical friends who nailed the next level of support yesterday in the March silver futures contract at $15.68 as the low yesterday around 9 am was $15.675. That’s amazing as that’s exactly where the Silver market sell off stopped.

Eurozone gold traders tell me all is winding down as we approach the holidays. They reported good physical demand was seen in the early part of December, but as of yesterday the physical market really got quiet.

Some domestic refiners still trying to move product before year-end are not finding too many interested buyers with the holiday week approaching.

Unless something out of the ordinary occurs, most dealers I spoke with expect a quiet ending in our metal markets thru year end.

Have a wonderful Wednesday.

Disclaimer: This editorial has been prepared by Walter Pehowich of Dillon Gage Metals. This document is for information and thought-provoking purposes only and does not purport to predict or forecast actual results. It is not, and should not be regarded as investment advice or as a recommendation regarding any particular security, commodity or course of action. Opinions expressed herein are current opinions as of the date appearing in this editorial only and are subject to change without notice and cannot be attributable to Dillon Gage. Reasonable people may disagree about the opinions expressed herein. In the event any of the assumptions used herein do not come to fruition, results are likely to vary substantially. All investments entail risks. There is no guarantee that investment strategies will achieve the desired results under all market conditions and each investor should evaluate its ability to invest for a long term especially during periods of a market downturn. No part of this editorial may be reproduced in any manner, in whole or in part, without the prior written permission of Dillon Gage Metals. This information is provided with the understanding that with respect to the opinions provided herein, that you will make your own independent decision with respect to any course of action in connection herewith and as to whether such course of action is appropriate or proper based on your own judgment, and that you are capable of understanding and assessing the merits of a course of action. You may not rely on the statements contained herein. Dillon Gage Metals shall not have any liability for any damages of any kind whatsoever relating to this editorial. You should consult your advisors with respect to these areas. By posting this editorial, you acknowledge, understand and accept this disclaimer.


Precious Metals Start Week Above Support Levels

The Market Gage - Dillon Gage's Precious Metals Newsletter

Precious metal prices start off the week above the very important support levels at $1,132 in the February Gold Futures and $ 16.06 in the March Silver Futures contract.

After a few of our readers asked last week why I refer a lot to levels of support and resistance I promised I would address it today.

For those who have been around awhile and remember when the COMEX Floor was open and only used open outcry for trading, charting gold and silver prices back then was just a tool traders used to try to predict future market trends.

As the Exchange eliminated open outcry trading and went totally with their electronic platforms, trading strategies changed as well. Sophisticated trading technologies emerged created by programs designed for the trader to be the first in line to execute a trading strategy whenever a news event or price trigger is met.

So algorithm programs were created. Algorithms are computer programs that execute a specific strategy. To be more specific, algorithms are a step by step set of operations to be performed as a calculation, data processing and/or automated reasoning tasks as explained by Wikipedia.

In the Precious Metals arena, some algorithm programs execute trading strategies that are triggered at certain price levels. When these levels are met, the buy or sell orders are executed and the positions are then taken over by the trading desk.

So when I ask my technician friends who just use technical levels to trade precious metals, they try to anticipate market levels that are expected to accelerate trading activities or stop trading activities at certain levels. By no means is this an exact science, but a tool used to try to predict anticipated market trends. I must admit I was never a big fan of charting markets, but to give credit to the ones who do in 2016 they did a fabulous job. Please remember their past success is history and one cannot expect future results to have the same success. In other words it’s just a gamble, so to speak, you can be on a win streak one second and lose it all in a blink of an eye.

Charting also cannot anticipate significant news that hits the wires or anticipate where premiums in the coin market will go in the near future. It’s just one of many tools the Wall Street Gold and Silver trader has in his or her arsenal.

I hope this answers all the questions my readers have on support and resistance levels.

Back to the markets. News in the ETF market, happy to see inflows in silver on Friday increasing by over one million ounces. Gold on the other hand saw a redemption of over 220,000 ounces out of the fund.

The dollar just slightly higher this morning and bonds yields both here and over the pond are seen in negative territory. A Wall Street gold trader I spoke with this morning said he still likes his short position and without any significant news to speak of, he believes the market will continue to trend lower. He also indicated at this point he believes silver is more vulnerable than gold to the downside.

Have a wonderful Monday.

Disclaimer: This editorial has been prepared by Walter Pehowich of Dillon Gage Metals. This document is for information and thought-provoking purposes only and does not purport to predict or forecast actual results. It is not, and should not be regarded as investment advice or as a recommendation regarding any particular security, commodity or course of action. Opinions expressed herein are current opinions as of the date appearing in this editorial only and are subject to change without notice and cannot be attributable to Dillon Gage. Reasonable people may disagree about the opinions expressed herein. In the event any of the assumptions used herein do not come to fruition, results are likely to vary substantially. All investments entail risks. There is no guarantee that investment strategies will achieve the desired results under all market conditions and each investor should evaluate its ability to invest for a long term especially during periods of a market downturn. No part of this editorial may be reproduced in any manner, in whole or in part, without the prior written permission of Dillon Gage Metals. This information is provided with the understanding that with respect to the opinions provided herein, that you will make your own independent decision with respect to any course of action in connection herewith and as to whether such course of action is appropriate or proper based on your own judgment, and that you are capable of understanding and assessing the merits of a course of action. You may not rely on the statements contained herein. Dillon Gage Metals shall not have any liability for any damages of any kind whatsoever relating to this editorial. You should consult your advisors with respect to these areas. By posting this editorial, you acknowledge, understand and accept this disclaimer.


Gold Britannia 2017

This is the 30th anniversary of the Royal Mint’s Britannia bullion. For more information, click here.


FLASH GAGE – Gold Rallies on weakened Dollar

The U S Dollar and the US Treasuries turn south and Gold rallies ten dollars after the news story is released that a Chinese Naval war ship seized an underwater drone deployed by a U.S. oceanographic vessel in the South China Sea.

A United States official said the drone was there to collect data that will help the U.S. Military with sonar data. The Chinese government, not buying that excuse, has the Chinese ship hauls the drone out of the sea, then leaves the area with the drone on board.


Level Heads Prevail in Precious Metals Market

The Market Gage - Dillon Gage's Precious Metals Newsletter

Level heads prevail as the market absorbs the news released this week from the FOMC.

At the time of this report both gold and silver are trading above the next critical support levels at $1,132 in the February futures contract and $ 16.06 in the March futures contract.

I’m told by my technical buddies that they expect these levels to be tested sometime today. A close eye needs to be on the activity in the dollar index as gold seems to react to any movement in the dollar. In the event these levels are violated today technically, the next level of support in gold is not till $1,118 in the February contract and $ 15.68 in March Silver futures contract.

Helping Gold and Silver stabilize this morning is a slightly weaker dollar and treasury yields off their previous highs of the week. Not helping anyone, is the spike up in mortgage rates seen in the last few weeks.

All four precious metal ETFs saw redemptions yesterday with gold losing 237,000 ounces and silver losing 2.3 million ounces out of the funds.

Some Wall Street traders I spoke with this morning are very content to be playing the gold market from the short side as one guy put it, “I think we have a long way to go. I expect in the near future you will see the Euro at par with the dollar which in turn will bring gold near the $1,000 level.” I sure hope he is wrong. On the other hand the more common sense trade in my opinion, would be waiting to see the economic data released in the first quarter 2017. Also seeing as how welcome Trump’s first 100-day economic policies are received by both houses. I’m sure the honeymoon won’t last too long between Trump and the mainstay Republicans and Democrats.

Some Financial advisors tell me their clients will be focusing on the Dow 20,000 level if reached and will be ready to take some profits off the table in the event there is no immediate follow thru to higher levels.

It’s always my attempt to bring to you as many opinions from as many diverse players in the Wall Street arena as I can in order for you to have a complete picture of how the street thinks and trades.

Have a wonderful Friday.

Disclaimer: This editorial has been prepared by Walter Pehowich of Dillon Gage Metals. This document is for information and thought-provoking purposes only and does not purport to predict or forecast actual results. It is not, and should not be regarded as investment advice or as a recommendation regarding any particular security, commodity or course of action. Opinions expressed herein are current opinions as of the date appearing in this editorial only and are subject to change without notice and cannot be attributable to Dillon Gage. Reasonable people may disagree about the opinions expressed herein. In the event any of the assumptions used herein do not come to fruition, results are likely to vary substantially. All investments entail risks. There is no guarantee that investment strategies will achieve the desired results under all market conditions and each investor should evaluate its ability to invest for a long term especially during periods of a market downturn. No part of this editorial may be reproduced in any manner, in whole or in part, without the prior written permission of Dillon Gage Metals. This information is provided with the understanding that with respect to the opinions provided herein, that you will make your own independent decision with respect to any course of action in connection herewith and as to whether such course of action is appropriate or proper based on your own judgment, and that you are capable of understanding and assessing the merits of a course of action. You may not rely on the statements contained herein. Dillon Gage Metals shall not have any liability for any damages of any kind whatsoever relating to this editorial. You should consult your advisors with respect to these areas. By posting this editorial, you acknowledge, understand and accept this disclaimer.


American Eagles Sales as of 12/15/16

U.S. Mint Year to Date Sales of Silver and Gold American Eagles

2016 is winding down at the Mint. The following chart includes the year to date totals from the U.S. Mint as of 5pm on December 15th. Changes below reflect the sales since our last report on December 9th.

Gold
Coin Sales in oz. /#coins + from 12/8/2016
One oz.
817,500
817,500
000
000
Half oz.
37,000
74,000
500
1,000
Quarter oz.
38,000
152,000
000
000
Tenth oz.
92,500
925,000
000
000
Total
985,000
1,968,500
500
1,000
Silver
Coin Sales in oz. /#coins + from 12/8/2016
One oz.
37,701,500
37,701,500
000
000

Special Edition- Gold and Silver Under Pressure

The Market Gage - Dillon Gage's Precious Metals Newsletter

The price of Gold and Silver under extreme pressure because of a much stronger dollar this morning.

A 25 basis point hike and the indication that there will be three more rate hikes in 2017 has really crushed the longs overnight. Previous strong physical buying in the Eurozone dried up in an instant as more sellers than buyer were reported.

The dollar index overnight reached a 14-year high and the Euro reached its lowest level since 2003.

Much higher bond yields also hitting the metals with a knockout punch. Ten-year yield treasuries hit a high overnight of 2.64 percent.

The gold ETFs yesterday saw very strong redemptions, down almost 400,000 ounces. At this moment our markets just look like a fire sale.

Even Ms. Yellen’s somewhat conservative comments did nothing to calm our markets after the comments were shared with the press. The consensus from the Voting Members of the FOMC seems to be let’s just keep raising rates till we get to normal which the Chairwoman said was a FED fund rate of three percent.

We all know that the Ms. Yellen is a dove and her outlook for future rate hikes will be data dependent. With the strong backlash from her peers, it looks like she will be under the gun to go with the crowd.

Nonetheless. the market is indicating that in 2017 much higher interest rates are in the cards. But if you remember in December 2015, when the Fed raised the rate 25 basis points, some Fed Presidents were calling for 5 rate hikes in 2016 which we all know never materialized.

The difference this year is the “TRUMP PHENOMENA.” It’s really too early to tell how his policies will affect the dollar and interest rates going forward.

The equity market exuberance is something we have never witnessed before. The question is, where will this end? The buying frenzy is at such an emotional point, it seems common sense and fundamentals are being ignored by the majority of equity investors.

So let’s stop, take a breath, remove the emotions and look at the total picture. Where do go from here? First of all, it seems that both the equity market and the precious metal market got ahead of themselves. Now that the Fed decision is out of the way, it’s time to relax and focus on what we can expect from the markets in 2017.

The next Fed meeting is not scheduled till February and the CME WATCH tool gives the chance of another rate hike at only 6 percent. The next meeting after that will be in March and the CME WATCH Tool gives
the possibility of a rate hike then at 25 percent. A possibility of a rate hike in May at 33 percent and I share one more in June at 51 percent.

So my take is, without more definitive information on future rate hikes and what affect Trump’s policies will have on our economy, it’s time for the price of gold and silver to settle down.

We have taken a big blow to the head, now it’s time to shake out the butterflies, settle down at these levels and give the market some time to reevaluate where the price of gold and silver should be.

Have a wonderful Thursday.

Disclaimer: This editorial has been prepared by Walter Pehowich of Dillon Gage Metals. This document is for information and thought-provoking purposes only and does not purport to predict or forecast actual results. It is not, and should not be regarded as investment advice or as a recommendation regarding any particular security, commodity or course of action. Opinions expressed herein are current opinions as of the date appearing in this editorial only and are subject to change without notice and cannot be attributable to Dillon Gage. Reasonable people may disagree about the opinions expressed herein. In the event any of the assumptions used herein do not come to fruition, results are likely to vary substantially. All investments entail risks. There is no guarantee that investment strategies will achieve the desired results under all market conditions and each investor should evaluate its ability to invest for a long term especially during periods of a market downturn. No part of this editorial may be reproduced in any manner, in whole or in part, without the prior written permission of Dillon Gage Metals. This information is provided with the understanding that with respect to the opinions provided herein, that you will make your own independent decision with respect to any course of action in connection herewith and as to whether such course of action is appropriate or proper based on your own judgment, and that you are capable of understanding and assessing the merits of a course of action. You may not rely on the statements contained herein. Dillon Gage Metals shall not have any liability for any damages of any kind whatsoever relating to this editorial. You should consult your advisors with respect to these areas. By posting this editorial, you acknowledge, understand and accept this disclaimer.

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FLASH GAGE – Market Algorithms Respond to Initial Fed News

Dillon Gage - Flash Market Update

Algorithms kick into high gear as the news on the FED decision hits the wires. Traders rely on these programs to position themselves to be first in line taking on a position as key words are released.

When the news was released that the Federal Reserve was raising the interest rate by .25% for the first time in 2016, we saw the dollar rally and yields on the ten-year going positive bringing the price of gold into negative territory.

Near-term risks are fairly balanced as they predict three rate hikes in 2017. One has to remember that in December last year, some FED presidents called for 5 rate hikes, but we didn’t get another none till today. The sceptics will argue that unless the economic data is compelling a rate hike is not in the cards first half of next year.

With treasury yields above 2.5 percent and a stronger dollar, one would have to believe the possibility of future rate hikes are in the cards giving gold the sell bias we see after the number. Maybe the market will settle down after the chairwoman gives her statement to the press. As I always say, I’ll wait for the market to absorb the news before taking a position.

Enjoy the rest of your day.

Disclaimer: This editorial has been prepared by Walter Pehowich of Dillon Gage Metals. This document is for information and thought-provoking purposes only and does not purport to predict or forecast actual results. It is not, and should not be regarded as investment advice or as a recommendation regarding any particular security, commodity or course of action. Opinions expressed herein are current opinions as of the date appearing in this editorial only and are subject to change without notice and cannot be attributable to Dillon Gage. Reasonable people may disagree about the opinions expressed herein. In the event any of the assumptions used herein do not come to fruition, results are likely to vary substantially. All investments entail risks. There is no guarantee that investment strategies will achieve the desired results under all market conditions and each investor should evaluate its ability to invest for a long term especially during periods of a market downturn. No part of this editorial may be reproduced in any manner, in whole or in part, without the prior written permission of Dillon Gage Metals. This information is provided with the understanding that with respect to the opinions provided herein, that you will make your own independent decision with respect to any course of action in connection herewith and as to whether such course of action is appropriate or proper based on your own judgment, and that you are capable of understanding and assessing the merits of a course of action. You may not rely on the statements contained herein. Dillon Gage Metals shall not have any liability for any damages of any kind whatsoever relating to this editorial. You should consult your advisors with respect to these areas. By posting this editorial, you acknowledge, understand and accept this disclaimer.

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Gold Hanging Tough As World Awaits Fed’s Rate Decision

The Market Gage - Dillon Gage's Precious Metals Newsletter

Gold trading in positive territory this morning as the world awaits the Fed decision on interest rates at 2pm EST today.

The price of gold holding above the key level of support I‘ve been referring to at $1,158 in the February CME Futures contract. Helping gold hold its position this morning is a weaker dollar index trading below the 101 level and 10-year treasury yields down to 2.43 percent.

On the other side of the ledger, the Gold ETFs continue their redemptions for almost a month now putting continued selling pressure on the price of gold.

The question all Wall Street Gold traders are asking this morning is, will we see a repeat of last December when the Fed last raised interest rates 25 pts…AND talked about more hikes to come in 2016 which in the end NEVER materialized? We all know their famous line, “All future rate hikes will be data dependent.”

Great, that gave us a CLEAR picture of future rate hikes. How about telling us you have no idea what will happen in 2017
and leave it at that. I think the market would appreciate an honest answer.

Let’s look at next year’s odds of a rate hike using the CME FED Watch tool. The chances a rate hike at the next FED meeting in February is only at 4 percent. The March level is reported at a 15 percent chance of a rate increase and the next meeting in May is showing only a 24 percent chance.

That’s why I believe even with all the negative news of late hitting the Gold market, future rate hikes continue to be in question and in turn the price of gold has been able to hold her ground. IF, the language from the Fed today gives us the impression it’s “one and done” as the CME Watch tool indicates, Gold SHOULD see a healthy bounce upward. Once again, the devil is in the details.

At 2pm I will be deciphering the Fed statement and will be sending out a FLASH GAGE with my comments on what was said, so watch Twitter.com/DillonGage.

Until then…
Have a wonderful Wednesday.

Disclaimer: This editorial has been prepared by Walter Pehowich of Dillon Gage Metals. This document is for information and thought-provoking purposes only and does not purport to predict or forecast actual results. It is not, and should not be regarded as investment advice or as a recommendation regarding any particular security, commodity or course of action. Opinions expressed herein are current opinions as of the date appearing in this editorial only and are subject to change without notice and cannot be attributable to Dillon Gage. Reasonable people may disagree about the opinions expressed herein. In the event any of the assumptions used herein do not come to fruition, results are likely to vary substantially. All investments entail risks. There is no guarantee that investment strategies will achieve the desired results under all market conditions and each investor should evaluate its ability to invest for a long term especially during periods of a market downturn. No part of this editorial may be reproduced in any manner, in whole or in part, without the prior written permission of Dillon Gage Metals. This information is provided with the understanding that with respect to the opinions provided herein, that you will make your own independent decision with respect to any course of action in connection herewith and as to whether such course of action is appropriate or proper based on your own judgment, and that you are capable of understanding and assessing the merits of a course of action. You may not rely on the statements contained herein. Dillon Gage Metals shall not have any liability for any damages of any kind whatsoever relating to this editorial. You should consult your advisors with respect to these areas. By posting this editorial, you acknowledge, understand and accept this disclaimer.