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 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

2017-predict

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

2016-lookback

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.


FLASH GAGE – Gold Rallies on weakened Dollar

flash-post

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.

l


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.

that th


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.


Dillon Gage Metals 2016 Holiday Coin Picks

holiday-2016-web
Gold and Silver Collectibles Make Meaningful Holiday Gifts

ADDISON, Texas (Dec. 13, 2015)—With Christmas just around the corner, Dillon Gage Metals is ready to make this year’s holiday-themed picks for gold and silver coins. Many sovereign mints including the U.S. Mint, Royal Canadian Mint and Perth Mint offer specifically themed holiday options and these selections can make cherished Christmas presents or even stocking stuffers.
Continue reading “Dillon Gage Metals 2016 Holiday Coin Picks” »


Strong Euro Zone Buying Keeps Gold Afloat

The Market Gage - Dillon Gage's Precious Metals Newsletter

Gold seems to be holding a key level of support at the $1,158 level in the February futures contact. Technical chart numbers reveal that this level is a must hold otherwise $1,132 is the next stop on this train.

Far East selling overnight put real pressure on the yellow metal, but strong Euro zone physical buying helping Gold stay afloat.

Silver still holding her own around the all-important $ 17.00 level.

All eyes will be on the Fed meeting mid-week, as a .25 basis point rate hike is virtually a done deal. What everyone is waiting for is not so much whether a rate hike will happen, but what the language reveals going forward on future rate hikes. The CME Watch tool shows a 5 percent chance of a rate hike at the next FED meeting in February and a 16 percent chance of a rate hike in March. So for the time being it looks like a one and done for at least the first quarter next year.

Some Financial advisors I spoke with this morning are still seeing a rotation out of metals and into equities. One prominent financial advisor indicated that he believes the equity market will continue its rally for at least another six months. Hard to argue against that statement with the momentum that’s in the market since the election.

In the event that the Fed has little to say on future rate increases gold should get a boost and rally from this very important support level.

A weaker dollar this morning is also keeping gold from heading further south. My only concern at the moment is seeing the 10-year treasury yield trading up this morning at 2.49 percent. Stronger bond yields along with a stronger dollar is bad news for our markets.

Wall Street day traders indicated this morning that algorithms are their tool for trading until the Fed speaks on Wednesday. Until then the very active Oil market is giving them the them best bang for their buck.

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 Held Down By Stronger Dollar and ETF Redemptions

The Market Gage - Dillon Gage's Precious Metals Newsletter

Sorry for repeating myself but it seems to be the same old story. Continued Gold ETF redemptions, a stronger dollar and higher bond yields are keeping gold from any upside potential.

The good news is that the price of gold and silver still remains in its most recent trading range and is not collapsing even with the continued pressure put upon it.

The Euro on the other hand is experiencing extreme pressure, down 3 big handles over the last 2 days after the (ECB) announced yesterday that they were extending the quantitative easing program another 9 months.

Most Wall Street Gold traders I spoke with this morning are waiting to hear what the Fed says next week and are content with letting their algorithm programs do the work for them.

Silver just barely holding on to the $17.00 level as some silver refiners lower premiums with the hope of moving some product before year end.

Gold kilo bar premiums on the rise after one refiner told me they are at capacity producing thru year end trying to meet all the gold kilo bar orders. I will be investigating today to see where they are all headed.

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 12/8/16

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

The following chart includes the year to date totals from the U.S. Mint as of 5pm on December 8th. Changes below reflect the sales since our last report on December 2nd.

Gold
Coin Sales in oz. /#coins + from 12/1/2016
One oz.
817,500
817,500
23,000
23,000
Half oz.
36,500
73,000
1,000
2,000
Quarter oz.
38,000
152,000
500
2,000
Tenth oz.
92,500
925,000
4,000
40,000
Total
984,500
1,967,500
38,500
67,000
Silver
Coin Sales in oz. /#coins + from 12/1/2016
One oz.
37,701,500
37,701,500
240,000
240,000

FLASH GAGE – European Central Bank Announcement Suppresses Gold

flash-post

The price of gold in negative territory this morning after the European Central Bank (ECB) announced the continuation of the bank’s asset – buying program.

The ECB asset purchasing program was due to end in March next year but the ECB said they will extend it to at least December 2017. The asset purchase plan is currently at 86 billion Euro and will be reduced to 60 billion Euros in April next year.

This came as a surprise to most economists that the ECB is extending their quantitative easing plan another nine months. After the announcement we saw the Euro Zone bond yields increase especially in Italy and Spain putting pressure on the price of gold over the pond.

In turn we see a stronger dollar index this morning off the news keeping a cap on any gold rally this morning.

Like any news item that effects the price of gold, we need to see how the market absorbs the information before taking on any position.

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.


Precious Metal Markets Looking For A Direction.

The Market Gage - Dillon Gage's Precious Metals Newsletter

With a steady dollar index and consolidating bond yields, the price of Gold and Silver is seen this morning in positive territory.

At the time of this report, February gold is trading right in the middle of the most recent trading range between $1,160 and $1,190. So I think it’s safe to say that all the negative news effecting gold and silver prices of late seems to have been absorbed by the market and in turn the market seems to be building a base for higher prices to come.

In order for the market to trade higher, my technical friends remind me of the previous level of support at $1,172 in the February gold contract. We must hold this level otherwise they indicate a testing of the most recent low in the February contract at $1,158 will be in jeopardy.

Everyone seems to be happy with silver back around the $17.00 level as indicated by the small inflows overnight into the Silver ETFs. The Gold ETFs still seeing continued redemptions and I expect that will not change until the market heads higher or the Fed meeting results are released next week.

The industrial metals to include Silver, Platinum and Palladium and the base group of metals should fair better under the Trump administration as infrastructure seems to be on the top of his list in his first 100 days in office.

A reminder, in the event that gold rallies from here, the level of resistance is $1,192 in the February contact.

Some Wall Street traders I spoke with this morning agree with the technical levels. Matter of fact one guy indicated that these are the exact numbers he has plugged into his algorithm platform. I guess with the lack of any new news in the market place, working off the charts seems to be the only way to trade Gold and Silver today.

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 Under Pressure From Many Fronts This Morning

The Market Gage - Dillon Gage's Precious Metals Newsletter

Gold under pressure from many fronts this morning as we see continued outflows of Gold ETF and a call for a new record high in the Dow Industrial average.

Also weighing on the price of gold this morning is the report from the CFTC showing the Net Long Fund Position in gold dropped for the third straight week now standing at 151,570 contracts, its lowest level since March.

So what this indicates to me is that the majority of short term speculators have exited the gold market. As I indicated before in my comments, I view the folks that trade the Gold ETF products as “speculators” and not investors and for the most part they are short term players. I view folks who buy the physical products as investors who tend to hold the coins or bars for a longer period of time.

Commodity hedge fund players can be categorized as speculators with virtually the same mind set as the ETF participant. This is confirmed by the CFTC report showing a strong exiting strategy as the price of gold declines.

Financial advisors loving the equity markets as the Dow is headed for a new all-time high this morning.

Here is a significant statistic you can share with your clients. With all the talk, hype, call it what you want, on how well the equity markets are doing, seemingly setting new highs every day, as of this morning the Dow is up over twelve percent on the year and the S&P is up over nine 9 percent for the year. And Gold which is getting battered, bad press, seeing every one running in the other direction from gold to equities, is UP FROM the first of this year “NINE PERCENT.”

So my question to all of you as investors and speculators is, would you rather be getting into a market at possibly the highs or would you rather buy into a market that was up double digits earlier in the year and has been given up by everyone with a lot of upside potential????

It will be interesting to see where the price of gold settles down and at what level the equities run out of gas.

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 12/1/16

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

The following chart includes the year to date totals from the U.S. Mint as of 5pm on December 1st. Changes below reflect the sales since our last report on November 18th.

Gold
Coin Sales in oz. /#coins + from 11/17/2016
One oz.
794,500
794,500
60,000
60,000
Half oz.
35,500
71,000
1,000
2,000
Quarter oz.
37,500
150,000
1,500
6,000
Tenth oz.
88,500
885,000
3,000
30,000
Total
956,000
1,900,500
65,500
98,000
Silver
Coin Sales in oz. /#coins + from 11/17/2016
One oz.
37,461,500
37,461,500
1,016,000
1,016,000

How December’s Expected Rate Hike Could Affect Gold

MarketGageR8

As we head into December, all eyes will be on the next Fed meeting set for December 13-14th. As the CME Fed watch tool indicates, a rate hike at the next meeting is almost a certain.

So if they do raise rates as expected, what effect can we expect it to have on the price of gold? Almost everyone believes a 25 basis point hike is already in the market. I can’t argue against that assessment, but one of our retail dealer friends asked me yesterday, with the possibility of more rate hikes in 2017 where will the price of gold go?

My first thought was if I knew the answer to that question I’d be in Aruba instead of the northeast this time of year, but being the polite guy that I am, I just said, “I really have no answer, we will just have to wait and see the economic data that’s released in early 2017.”

Let’s look at the CME FED FUND Watch tool to view what the market thinks are the chances of a rate hike at the FED meetings in February and March. The market indicates the chance of another rate hike in February is at 5 percent. and at 15 percent for the meeting in March. So at this point, the market says it’s a one-and-done, for at least the first quarter next year, but with the new President coming in we all can agree that 2017 should be a lot different than 2016.

Let’s look at the most recent high in the price of gold, that was on election night trading a high of $1,237. The dollar index at the same moment was trading at 95.88. Ten Year Bond yields were at 1.72 percent and Thursday we set a new high yield for 2016 at 2.492 percent.

At this moment in time, after the November job numbers report was released at 8:30 ET, February gold is trading at $1,173, the Dollar index is at 100.94, and 10 year bonds are yielding 2.41 pct.

The question that is on everyone’s mind this morning is will gold hold these levels or head south as the majority of the street predicts.

With the price of gold breaking through two key support levels in the February gold futures contract at $1,190 and $1,172 to trade down to $1,162.20 yesterday, the market sell off had gained momentum. BUT at that level good buying emerged into the market and the selling dried up. Which in turn got some nervous shorts to cover and Aa rally ensued, which I must admit I am very happy to see.

Thursday morning one Wall Street Gold trader I spoke with was calling for a testing of the low in the price of Gold that was hit in 2015 at $1,046. I said that’s a stretch, don’t you think? I thought his reply was kind of funny, “You talk your book and I’ll talk mine.” So as we settling above the last level of support at $1,172 in February, this will give the shorts something to think about which way the market is headed.

As I make dinner reservations at a Second Ave. New York Steak House to thank my technical friends for a great job predicting the direction of gold in 2016 and to assure my readers I will look to them for future indications. BUT hold on, I still have not yet conceded that I am wrong about the direction of the market, because I enjoy being the only guy in the room with a contrarian opinion from the rest of the group.

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.


Gold ETF Sell Off Takes Slower Pace

The Market Gage - Dillon Gage's Precious Metals Newsletter

The price of gold remains steady this morning even with a small gain in the dollar index. For the thirteenth straight day, we see the gold ETF sell off continue but at a slower pace. Possibly the massive redemption sell off is coming to an end. This is something the longs are looking for.

As I reported Monday, I believe the market took the ETF sell off and the open interest decline in the CME Gold futures of over 250,000 contracts from the highs earlier in the year, extremely well.

Today the CME FOMC market watch tool shows a 94 percent chance of a rate hike in December from a high of 98 percent yesterday.

The Oil market is up big this morning (over 5 percent) as OPEC said they are close to a deal on the first Oil supply cut in eight years. I believe the market has over reacted to the news. The Iranian Oil ministry said they will not cut, so a reduction in production is far from certain. The action in oil has been so intense this morning that it has attracted Wall Street Gold traders to leave the gold market for a short period as they see volatility in the Oil market at its best and love to get involved.

My technical friends still contend they will be right and I will be wrong as they indicate gold cannot sustain a rally as the charts indicate a sell bias is in the works. Just to add fuel to their case, they remind me that even though a rise in interest rates is not part of their charting calculation, it can only help their prediction. They remind me this morning that they are using February gold futures as their indication as December is not the active month any longer. They will now use a $1,190 resistance level in the February futures as their line indicator. At the time of this report, February is trading at $1,181, down $10.00 dollars on the day. Next level of support in the February futures is $1,172.

Please excuse me as I look on the internet for a fine steak house to treat my friends to, as my position gets weaker this morning. But I’m not conceding yet. I still believe the gold market has held up well (even with all the negative news surrounding it) and will surprise everyone.

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 Hangs On Even With ETF Redemptions

The Market Gage - Dillon Gage's Precious Metals Newsletter

Where did everyone go?

I find it very interesting that the gold market has hung on even with strong with the significant Gold ETF redemptions over the last 12 business days and most important, even given the dramatic decline in the Gold futures open interest.

The CME Futures Gold open interest is down 200,000 contracts from the highs at approximately 421,000 contracts. I don’t remember seeing the open interest this low for quite some time.

So after speaking with my technical gurus, I have taken the other side of their trade. Last week I had reported that my tech friends indicated that the level the market had to hold was $1,191 in the December contract or we would see further declines.

At the time of this report we view the December gold price up $9.00 on the day at $1,187.50.

I think the technical boys have it all wrong. The selling pressure is totally out of gas. I believe the interest rate increases are already factored into the market and unless the FED surprises everyone and raises the FED rate 50 basis points in December, the selling pressure is totally extinguished.

So having the nerve to disagree with the tech guys, I’m doubling down on all the dinners I owe them for being right all year and predicting a gold rally is in the works.

Maybe the Trump rally in the equity market is out of gas also.

To summarize why I’m taking this stand:

  • CME Gold open interest has been declining and the market seems to be taking it well.
  • Financial advisors I spoke with report many, many folks have left the Precious Metal ETF market for the equity craze, as seen by the amount of Gold redemptions taking place.
  • The dollar rally has also run out of gas trading at 101.50 after reaching a year high of 102.05.
  • The market has already accepted a 25 basis rate hike in December.

This time of year you always hear equity traders on business news channels calling for a Christmas stock market rally. This year I’m asking Santa for a Christmas rally in precious metals. Otherwise, Santa will have to help me pay for the expensive dinner I’ll have to buy my technical buddies.

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.


Durable Goods Report Crushes Gold

The Market Gage - Dillon Gage's Precious Metals Newsletter

The 8:30 am durable goods figure came in at much better than expected at 4.8 percent after the street was looking for a 1.5 percent increase.

Immediately gold sold off from the $1,207 area in the December contract to a low of $1188.30. One happy Wall Street trader told me that this strong number takes out the chance of a one and done rate hike in the December. Previously the CME rate hike watch tool for future rate hikes in 2017 was relatively flat. Now looking at the rate curve, we see March with a 20 percent chance of the next rate hike.

The lack of liquidity in gold and silver below the previous support levels helped fuel the decline.

Also fueling the selloff is the stronger dollar. At the time of this report the dollar index is trading at the highs of the day at $101.76. One Wall street economist said he wouldn’t be surprised to see the dollar’s strength continue to the 107-108 area. I thought to myself, if he is correct we could be looking at $1,050 gold and $12.50 silver. I sure hope this guy is way off. I can’t comment on his prior predictions, I don’t have a track record on him.

If anyone is looking for support in the price of gold, my tech guys will refer you to October 15th of last year when we had a high spot price of $1,191. They tell me we have to hold that price today or lower we go.

Seems with all the increases in interest rates on the horizon one would expect this sell off to continue. I’m looking far and wide to dispute that last statement but with everyone cashing in ETF holdings in gold and silver and the crazy equity market loving the new administration, I don’t see anything that could support a rally in gold or silver.

I expect this sell off to be a little over done todayas Thanksgiving is tomorrow and a lot of traders have extended their 4-day holiday, because as one guy put it, “there is not a lot going on.” Well, he better call in because the activity in metal is brisk this morning.

Enough about the markets as we all take time off to give thanks for our families and friends, our job, and our great country. Whenever I see a service man or woman in uniform I make sure I go over to them and say, “Thank you for your service.” I hope you all will do the same.

And one more thing. We at Dillon Gage never take for granted our relationships with our clients. We appreciate your business and thank you for your support. In my 40 years in the business, I like to think I have no clients, none…only friends, as I know if we become friends we both will look out for each other knowing we will do whatever it takes to make us both successful.

On behalf of all the folks at Dillon Gage we want to wish you all a very happy Thanksgiving.

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 – Why are Precious Metals All Up?

flash-post

Wondering why all four precious metals are in the green today with the Dow, Nasdaq and S&P at all-time highs?

You can thank the Base Metal group of metals for leading the way. Today three-month base metal prices are up an average of over 1.3 percent. Copper this morning leading the charge up over 2 percent with all the other base metals seen in positive territory.

The base metal market looking at the President elect’s first 100-day plan to tackle the U.S. infrastructure problems first hand. Seems to be one of his top priorities.

The dollar seems to be consolidating at these levels and the gold ETF in its eighth day of declines. The silver ETF yesterday finally showed an increase in holdings.

December gold this morning still trading above the $1,212 level support after trading lower yesterday around the $1,206 area. Silver also looked weak yesterday trading just above the $16.52 area.

If I may give my evaluation of the market today with all that’s happening in the equity world, I think gold and silver at these levels are a positive. My only concern is that after talking to some Wall Street Gold traders yesterday they indicated that they will continue to sell gold into any rally in the price.

So the market seems to be expressing conflicting opinions. The question remains what will be the dominant force to move the price in either direction.

We will just have to wait and see and hope we can once again see some volatility as we did last week when the CME reported all-time record volumes in the Gold Futures. In the meantime I have to believe there is a sell bias in place in our market and the shorts might hold the winning hand.

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 and Silver ETF Experiencing Strong Redemptions

The Market Gage - Dillon Gage's Precious Metals Newsletter

After making new highs for the year in the Gold ETF on Wednesday November 9th and new all-time highs in the Silver ETF on Tuesday October 25th; we witness for the seventh straight day strong redemptions in both metals.

Financial advisors report many retail investors continue to cash in their ETF positions to buy equities.

What is very encouraging, even with the strong sell off in the ETFs, is that the price of gold seems to be shrugging off the physical selling necessary to sell off the ETF holdings.

The price of Gold and Silver are back above the critical support levels violated last week at $1,212.00 in the December contract and $16.58 in the December silver contract.

Base metals are helping our cause as copper is up 2 percent this morning and the recent rally in the dollar seems to be stalling. At the time of this report the dollar index is trading at 100.95 after reaching a high last week at 101.49.

Some of the Wall Street Gold traders I spoke with this morning with an appetite for risk are selling into any rally in both gold and silver, believing this rally will not be here for long. They believe the momentum in a stronger dollar is just pausing here and will continue higher in the coming days putting pressure on the gold price.

I think the only bit of news that could bring a strong rally in the price of gold is if the FED does nothing in December. With the CME FED Watch tool at 95.4 percent, a chance of a rate hike in December the market is almost a given, but if the FED does not deliver, I expect the Gold market will see an impressive rally. Don’t forget what the chairperson said last week, “a rate hike is expected relatively soon.” The market is interpreting that as December, I cannot imagine how the markets will react if it doesn’t happen.

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.


U.S. Dollar’s Rise Whacks Gold

The Market Gage - Dillon Gage's Precious Metals Newsletter

The movement in the value of the U.S. Dollar this morning is orchestrating the movement in the price of gold. As the dollar index reached new highs overnight at 101.37, strong selling emerged violating both support levels bringing gold down to the $1,201.30 level in the December contract.

The price of Gold is now at a 6-month low.

As I watch the activity in the currency markets this morning, it seems that there is a direct negative correlation between the dollar and the price of gold.

This morning, as European Central Bank President Draghi was speaking, the Euro strengthened and the dollar retreated a bit bringing the price of gold back to its previous support level at $1,212.00, where is sits as I write. The longs thank you for your comments Pres. Draghi.

Yesterday, U.S. Federal Reserve Chair Janet Yellen said that interest rates could rise “relatively soon.” Sounds like she is putting in a hedge on her stance for a December rate hike. Can someone out there define in actual time for me the definition of “relatively soon” or for that matter can anyone define “soon” in relation to time or days?

Sounds like my kids excuse for not doing something. “Dad, I’ll get to that, soon.”

So as she hedges with her statement “soon”, might not that be in December? Today’s CME Watch tool gives a December rate hike a 91 percent chance of happening. All the markets are expecting a hike in December. If she doesn’t deliver, I expect the market will react violently to the news.

Sixth day in a row we see outflow in both the gold and silver ETF holdings. These redemptions
continue to depress the gold and silver prices. The combination of the stronger dollar and the ETF redemptions are making it very difficult for gold and silver to sustain a rally.

I do expect this sell off to create interest in the physical arena, as dealers scramble to position themselves with the most profitable products for yearend and we all know what kind of activity to expect for Mint products in early January. Believe it or not, it’s right around the corner.

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 11/17/16

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

The following chart includes the year to date totals from the U.S. Mint as of 5pm on November 17th. Changes below reflect the sales since our last report on November 11th.

Gold
Coin Sales in oz. /#coins + from 11/10/2016
One oz.
734,500
734,500
33,500
33,500
Half oz.
34,500
69,000
500
1,000
Quarter oz.
36,000
144,000
500
2,000
Tenth oz.
85,500
855,000
5,000
50,000
Total
890,500
1,802,500
39,500
86,500
Silver
Coin Sales in oz. /#coins + from 11/10/2016
One oz.
36,445,500
36,445,500
1,400,000
1,400,000

FLASH GAGE – Dollar Index Breaks Thru

Dillon Gage - Flash Market Update

The U.S. dollar index broke thru a 13-year high this morning, putting pressure on the price of gold.

If the dollar index increases, and that seems to be the trend, beware of that major support level at $1,212 in the December contract.

Soft support at $ 1206 and if that gets violated I expect we are off to the races.

Have a wonderful day.


Dillon Gage Metals Hires New Chief Operating Officer

furmanek
Veteran COO Mark Furmanek Set to Facilitate Operational Excellence

ADDISON, Texas (Nov. 15, 2016) – Dillon Gage Metals, an international precious metals wholesaler, has announced the appointment of Mark Furmanek to serve as chief operating officer for the organization. His oversight will include systems development and implementation, staff planning and management, and quality control of client satisfaction. His start date is effective November 28th.

“Recruiting talent of Mark Furmanek’s caliber is a big win for our organization,” said Terry Hanlon, president of Dillon Gage Metals. “Mark is seasoned in all aspects of operations and is geared to drive business innovation and revenue growth. His combined experience in trading and operations make him a perfect fit for Dillon Gage. We feel confident that the benefit will be seen by our customers, as well as our employees.”

Furmanek joins Dillon Gage with a wealth of experience in gaining operational efficiencies and increasing operational capacities. His background includes integrating advanced technologies into corporate infrastructure to differentiate services and improve efficiencies and productivity.
Prior to joining Dillon Gage, Furmanek was an executive vice president and chief operating officer for New Direction IRA, an industry leader in self-directed IRAs. He has also held managerial positions with Scottrade, Inc., where he rose from trader to branch manager.

“I believe this opportunity is going to be a great fit for my experience in driving revenue growth through business innovation,” stated Furmanek. “Dillon Gage already maintains a sound reputation in the precious metals industry for cutting-edge operations, and it’s my goal to advance this directive even further.”

Furmanek graduated with a degree in economics and a minor in finance from Eastern Illinois University.
For more information, please visit www.dillongage.com or call (800) 375-4653.

# # #

About Dillon Gage Metals
Dillon Gage Inc. of Dallas (DillonGage.com), founded in 1976, companies include:

  • Dillon Gage Metals (www.DillonGage.com/Metals), one of the world’s largest precious metals wholesale trading firms. The firm is an authorized purchaser for all major world mints and maintains inventory in over 20 countries around the world. 800-375-4653
  • FizTrade Online Trading (www.FizTrade.com) offers real-time bid/ask trading platform for gold, silver, platinum and palladium. 800-375-4653
  • Digital Metals (www.DigitalMetals.com) delivers advanced tools and technologies that enable market participants to be more successful in their businesses. Digital Metals offers cloud-based solutions for physical precious metals marketplace built upon the Digital Metals Platform. 866-494-3577
  • Dillon Gage Refining (www.dillongage.com/refining/why-dg), professional assayers and refiners of precious metal scrap, from low grade to karat scrap. Stone removal services and diamond experts on staff. 888-436-3489
  • International Depository Services Group with locations in Delaware, USA (www.ids-delaware.com; 888-322-2431), and Ontario, Canada (www.idsofcanada.com; 855-362-2431), offers secure, efficient and insured precious metals and certified coin depositories that focus of custom business logistics solutions which include storage, fulfillment, inventory managements and many other value added services.

Contact:
Jeffrey Cheatham
Senior Account Manager
TrizCom PR
(972) 247-1369
jeffc@trizcom.com


Strong Dollar Pressures Gold and Silver

The Market Gage - Dillon Gage's Precious Metals Newsletter

A strong dollar and extensive outflows in the gold and silver ETFs overnight are putting continued pressure on the price of gold and silver.

The dollar index hitting the 100 figure overnight is bringing gold down to its knees at a major support level at $1,212 in the December contract.

The combination of a very strong dollar and higher real interest rates will continue to put a sell bias in the precious metals arena.

On Friday, Federal Reserve Vice Chairman Stanley Fisher indicated, that the FED is ready to raise rates in December as the Fed’s numbers on inflation and job growth are very close to meeting their objectives.

The CME Fed watch tool indicates the chance of a rate hike in December is at 85.8 percent. The concern I have, since a December rate hike is almost a given, is how many more rate hikes will be put into place in 2017?

I have to give some press to my technical friends this morning, as they have stood by me all year with great analysis, they say gold must hold $1,212 in the December contract, then there will be some support, but not much, at the $1,206 level. If that level gets violated it’s off to the races. They claim after that, the next level to watch for will be $ 1178.

Silver is in the same boat, maybe a little more vulnerable, with weak support levels at $ 16.90, $ 16.58 and again at $ 16.45.

The financial advisors I spoke with this morning indicated that they have seen a complete reversal of the so-called “have to have a balanced portfolio” mentality to a “find me the best stocks that will flourish during the next four years under the Trump administration” mentality. Quite a change after the record levels seen in the ETF holdings this year.

Retail physical redemptions have gained momentum and some dealers indicated that they will be reducing bids for certain products as carrying costs are expected to increase in the short term and some breathing room is needed to carry that inventory.

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.


FLASH GAGE – Gold Sell Off Analysis

Dillon Gage - Flash Market Update

Walt’s believe it or not “Flash Gage.”

There are three components to the selloff in gold this morning.

  1. Coppers strong reversal from last Fridays close being up an incredible 20 percent in just one week. Now reversing breaking thru key support levels.
  2. Nickel trading up at a 17 month high also taking in a strong reversal.
  3. Most important…is what has fueled the stock market is beginning to take a negative effect on the gold price. That is an increase in interest rates ahead of the next Fed meeting. Bond yields the major factor in the selloff of Gold this morning on President elects plan to significantly increase spending on infrastructure. This can increase the inflation outlook and substantially increase the rate of rate hikes next year.

Rising yields and a stronger dollar really putting gold in a strong sell off this morning.

With the stock market flat to a little lower this morning, I expected gold to be supported at the $1,250 area, but as we traded thru that level selling really accelerated and took gold below the $1,230 level.

The negative correlation between the price of Gold and equities has completely reversed today as the stronger dollar and a potential in runaway spending takes front stage for the time being.

All I can say now is “watch out below.”

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.


Gold Still Reacting to Election Results

The Market Gage - Dillon Gage's Precious Metals Newsletter

Wednesday and Thursday, day one and day two after the election, retail equity investors saw what they believed to be buying opportunities in equities that they could not pass up. Based on Trumps’ proposed platform, equity investors gobbled up companies that could pay dividends in the future under the new Trump
administration.

The CME exchange experienced all-time record volumes in the Gold futures contract on Wednesday, trading 800,000 contracts (for one day) after reaching a high of $1,338.30 in the December futures contract Tuesday evening during the election results. Then later on Wednesday, the gold trade was down to the $1,268 area as the equity market gained momentum. Thursday was no different as we seen the December gold contract trade 400,000 times, that’s a lot of action.

Last night Far East selling emerged, putting more pressure on the yellow metal and seeing the December contract trade down to the $1,250 area.

Some Wall Street institutional Gold Traders have reported taking on short positions starting Wednesday and will ride that bias until the equity markets settle down.

Financial advisors I spoke with this morning have indicated that they have seen strong selling in the Gold ETFs overnight. In turn they are cashing in their gold chips for some action in the equity markets.

A stronger dollar index and weaker oil prices haven’t helped the price of gold. Also putting pressure on gold this morning is the increasing odds of a rate hike in December as the CME Rate Watch tool now stands at a 81 percent chance that there will a rate increase at the December FED meeting.

I expect the strong sell off in the price of gold to settle down today, as equities are called to open slightly lower and the excitement in the equity market loses some steam.

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 11/10/15

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

The following chart includes the year to date totals from the U.S. Mint as of 5pm on November 10th. Changes below reflect the sales since our last report on November 4th.

Gold
Coin Sales in oz. /#coins + from 11/3/2016
One oz.
701,000
701,000
25,000
25,000
Half oz.
34,000
68,000
1,500
3,000
Quarter oz.
35,500
142,000
2,500
10,000
Tenth oz.
80,500
805,000
2,500
25,000
Total
851,000
1,716,000
31,500
63,000
Silver
Coin Sales in oz. /#coins + from 11/3/2016
One oz.
35,045,500
35,045,500
425,000
425,000

Trump Victory Leads to Wild Night of Trading

The Market Gage - Dillon Gage's Precious Metals Newsletter

A wild election night of trading in all markets. As the results started coming in showing the possibility that Trump will be the next president, the Equity markets headed south and at one point were down over 800 points and gold was up over 60 dollars on the news.

One market that really took a hit was the Mexican Peso. At one point last evening the Peso was down vs. the U.S. dollar over 13 percent.

Base metals overnight started lower but quickly recovered with nickel and copper up over 6 percent at new 2016 highs.

As I indicated in last week’s comments, gold traders on the street were tired of seeing a market trade sideways with no volatility and were hoping for some action. And action they received.

There was tremendous activity in the December gold contract overnight. so much so, that at the time of this report the CME volume is over 600,000 contracts for the day, heading to (and will probably break) the all-time high record volume for one day on the CME Gold contract, set back in April 2013, at over 751,000 contracts changing hands. A remarkable amount of trading activity.

Even the CME Copper futures contract overnight showed record volumes as the talk of rebuilding the U.S. infrastructure news boosted the price.

Some dealers I spoke to early this morning in Europe have said that physical demand for both gold and silver has picked up over the last few days and they anticipate that continuing over the days to come. One dealer said, “not only was I surprised by the Trump victory, I believe now even more than ever, the physical gold market will not be viewed as a safe haven any longer, but will become an investment vehicle to offset negative interest rate issues around the globe. Who knows how the new U.S. administration will conduct global business.”

CME Watch tool this morning is calling for 66 percent chance of a rate hike in December. Since the first of the year I’ve been indicating that a rate hike will not occur in 2016 and I still stand on that prediction even with the high odds of a rate hike in December. The economic data at this point still does not justify a rate hike. In my opinion, if a rate hike doesn’t happen in December, gold should have a strong move to the upside.

I just loosened my seat belt as the Dow Industrial average opened unchanged and Gold traded below the $1,300 dollar level. Should be an interesting day.

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.


A Cup Of Conversation for Election Day

electionr

As I’ve said before, I never take sides in an election, neither do I talk about religion or the food I choose to eat. But there are times when an interesting topic comes across the Dillon Gage news desk that is really interesting and worthy of pondering over a cup of coffee.

So, without picking any candidate today, let’s talk about what happens in the event that this presidential election ends in a tie. Let me explain a scenario of how both major candidates can achieve 269 electoral votes and not reach the magical 270 needed to become our next president.

Meet the man trying to keep Utah from going red or blue in today’s election. His name is Evan McMullin, a former CIA officer, investment banker and most recently a Capitol Hill staffer. To be honest I did not know about this fellow till today. McMullin is on the ballot in only 11 states and has received virtually no press.

But McMullen, who is a Mormon, has garnered strong support in Utah. In fact, in a poll released this morning in Utah, Trump only has a slight lead in Utah with McMullin a very, very close second and Hilary coming in third. A victory for McMullin would keep Utah’s 6 electoral votes from going either red or blue and could keep either of the other two candidates from getting to 270.

In the event that he captures Utah and no candidate gets 270 electoral votes, the decision goes to the House of Representatives. Yep, if no candidate receives a majority of Electoral votes, the House of Representatives elects the President from the 3 Presidential candidates who received the most Electoral votes. Each state delegation has one vote. The Senate would elect the Vice President from the 2 Vice Presidential candidates with the most Electoral votes. Each Senator would cast one vote for Vice President. If the House of Representatives fails to elect a President by Inauguration Day, the Vice-President Elect serves as acting President until the deadlock is resolved in the House.”

Let me throw you a curveball. Were McMullin to take Utah’s six electoral votes, that would put him in play as a candidate if the election were thrown to the House of Representatives. It’s possible to imagine a scenario in which establishment Republicans, who have never been comfortable with Trump, might rally behind McMullin. It’s extremely unlikely, just like an Electoral College deadlock in the first place, but it makes for a really interesting conversation to share over a cup of coffee. 2016 has been the craziest political year this country has ever seen what’s wrong with having a second cup and continuing this friendly conversation.

Have a wonderful Election day. (And remember to Vote!)

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.


How Does VIX Look At the Current Market

Dillon Gage - Flash Market Update

The CBOT Volatility index (VIX) is known as the world’s barometer to predict market volatility. This volatility index attempts to show volatility for the next 30 days. It is constructed using the implied volatilities of a wide range of S&P index options.

Right now the VIX index is down on the day almost 17 percent at 18.74. Friday’s close was in the 23 area, but as soon as the announcement was made by the FBI director over the weekend that there will be no criminal charges made against Hillary Clinton, the market seems to have taken a calm pill.

At the time of this report, the Dow is up a whopping 350 points and Gold is under pressure,
down 23 dollars.

Of course, this not an indication who WILL win the Presidential Election. What this number means in my opinion is that if Hillary wins, the odds of indicting a president-elect goes away. This is very important for market stability. Remember the equity market more than any market hates uncertainties.

Gold and silver investments of late have been fueled by uncertainties.

To summarize, as I indicated in this morning’s comment, if there are ANY surprises in the next 36 hours, both the equity market and our gold and silver market will react accordingly.

So, don’t get too comfortable and loosen your seatbelt, just in case there’s a collision.

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.


The Election, The Economy and Precious Metals

The Market Gage - Dillon Gage's Precious Metals Newsletter

As the old saying goes, there are two things in life that are CERTAIN: death and taxes. Would anyone be upset if I add a third?

THIS ELECTION! And I’m CERTAIN everyone is happy its coming to an end.

Or is it?

Markets don’t like uncertainties, so I suspect that even after the winner of the Presidential election is announced, some news will emerge to that will affect the markets. The country just seems so divided, that whoever wins some backlash is likely. (Having said that, I expect very volatile markets on Wednesday)

My concerns don’t stop with market uncertainty, I feel the real problem lies in what will become of Congress in 2017? May I be so bold as to add one more certainty? No matter who is our new President, Congress in 2017 will most likely be more divided than ever.

Will our debt, entitlement problems and healthcare ever be addressed?

How serious is the U.S. economy? Here is how we spent tax dollars last year.

  • Social Security- 24 percent of the budget
  • Medicare, Medicaid and children’s health insurance- 25 percent
  • Safety net programs- 10 percent of the budget
  • Defense and international security- 16 percent

Add these four items together and 75 percent of the budget is gone.

Pay down the debt? How?

Oh one more item: Do you know that the share of Americans in the labor force, meaning those with jobs or actively looking for work, is at a FOUR DECADE low at 62.8 percent.
Friday’s jobs report came in at 161.000 jobs created. Sounds like a good number until you dive a little deeper and discover that 90,000 PART TIME jobs were created and 103,000 full time jobs were LOST, resulting in more families having to work multiple jobs to make ends meet and let’s not forget part time jobs come without healthcare benefits.

Need I say more?

Does all this give credibility to the large increase in how the “retail” investor is diversifying their portfolio to include metals as a hedge? Is this the reason that the Silver ETF holdings reached an all-time high last month?

Have I given you enough to think about?

The fact remains that now more than ever, regardless of the kind of investor you are, a BALANCED portfolio that include precious metals is a must to reach your financial goals.

Oh, one more thing, Please vote!!!

Even though all the news has been on the presidential race, there are many important down ballot races that affect you locally. It’s your duty and a privilege as a proud American to cast your vote.

If you skip out you have no one to blame but yourself.

God Bless America and God Bless our Veterans.

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.


Where Did The U.S. Go In Gold Jewelry Demand?

The Market Gage - Dillon Gage's Precious Metals Newsletter

The World Gold Council reported that gold demand in the 2nd quarter followed trends from the prior quarter: Huge ETF inflows counterbalanced by anemic jewelry demand amid rising prices. Investment was the largest component of gold demand for two consecutive quarters, the first time this has ever happened.

The World Gold Council goes on to say that this has been in no small part due to demand from Western investors across the spectrum, from retail to institutional and for bars, coins and ETFs.

Do you think that negative interest rates in some parts of the world are making an impact in the gold market?

Continue reading “Where Did The U.S. Go In Gold Jewelry Demand?” »


American Eagle Sales as of 11/3/2016

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

The following chart includes the year to date totals from the U.S. Mint as of 5pm on November 3rd. Changes below reflect the sales since our last report on October 28th.

Gold
Coin Sales in oz. /#coins + from 10/27/2016
One oz.
676,000
676,000
17,000
17,000
Half oz.
32,500
65,000
1,000
2,000
Quarter oz.
33,000
132,000
000
000
Tenth oz.
78,000
780,000
1,000
10,000
Total
819,500
1,653,000
19,000
29,000
Silver
Coin Sales in oz. /#coins + from 10/27/2016
One oz.
34,620,500
34,620,500
370,000
370,000

Brexit Must Now Gain Parliament Approval

flash-post

The Brexit vote to leave the EU was upended this morning after the High Court in London delivered a blow to Prime Minster Theresa May by ruling that she must seek Parliamentary approval before starting the process to leave the European Union.

Once more a government flexes its muscle and try’s to circumvent the will of the people.

Immediately as this story hit the wires both gold and silver sold off hard.

Mrs. May will appeal that decision to the Supreme court of the United Kingdom which will hear arguments from both sides in December. Her party holds a slim majority in Parliament. Most lawmakers opposed the vote to leave the EU, but it might be political suicide to vote against the will of the people.

Preliminary open interest figures in gold this morning show 14,000 new longs in the CME gold contract.

As I said in my comment yesterday, everyone’s looking for some volatility in the gold market.

To those folks who screamed loud enough, all I have to say is enjoy the ride.

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.