Asian Market Drop Aids Gold

Asian Market Drop Aids Gold

Asian Equity markets all in the red overnight after some big tech company earnings miss street expectations.

Third quarter GDP came in at 3.5 percent. Consumer spending strong in third quarter not impressing equity investors this morning.

While a big surge in government spending is found to be troubling to some on the street.

The price of Gold this morning is in positive territory, ignoring a stronger dollar, but I expect this to be short lived “UNLESS” the selloff in the Dow today accelerates, then the price of Gold could test the most recent high tested twice this week at $1,239.20.

As we get ever closer to the mid-term elections, I expect volatility in the equity markets to continue and the price of Gold to benefit from the madness.

Both Silver and Platinum are watching the action in the Gold market from a distance as little investment demand is seen in both products.

Hedge Fund profit taking is being seen in the Palladium market as prices correct from their extraordinary climb to recent record levels. The physical spot Palladium market is still experiencing tight supplies and still in backwardation mode as indicated by the current EFP.

Europe Expecting to Freeze Interest Rates Thru Summer

On Thursday, European Central Bank Governor Mario Draghi said that, tension between Brussels and Rome over the draft of the Italian budget, uncertainties over the Brexit negotiations and the US-China trade war are contributing to weaker than expected data.

So the ECB decided to hold their interest rate at 0.00% and the deposit facility at -0.40%. Draghi went on to say he expects to keep these rates steady until summer 2019.

This has to put some pressure here on the Fed and maybe, just maybe, give them a reason to pause raising rates in 2019.

The news out of Europe has to be good news for Gold investors.

Going forward, I’m sure the Fed members will monitoring the activity in the Equity markets and what impact the Mid-terms could have on the Presidents plans for continued economic growth.

Have a wonderful Friday.

Disclaimer: This editorial has been prepared by Walter Pehowich of Dillon Gage Metals for information and thought-provoking purposes only and does not purport to predict or forecast actual results. This editorial opinion is not to be construed as investment advice or as a recommendation regarding any particular security, commodity or course of action. Opinions expressed herein cannot be attributable to Dillon Gage. Reasonable people may disagree about the events discussed or opinions expressed herein. In the event any of the assumptions used herein do not come to fruition, results are likely to vary substantially. It is not a solicitation or advice to make any exchange in commodities, securities or other financial instruments. 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. Dillon Gage Metals shall not have any liability for any damages of any kind whatsoever relating to this editorial. You should consult your advisers with respect to these areas. By posting this editorial, you acknowledge, understand and accept this disclaimer.