Currently the price of Gold is under pressure as the U.S. Dollar index continues to rally versus other world currencies, now approaching the 97 level.
If the rally continues, technical support levels in the price of Gold will be tested. Spot support levels will be the previous resistance levels at $1,303.
A few Wall Street traders I spoke with this morning do expect that technical level to hold as global economic issues are still dominate the business headlines each day.
The price of Silver and Palladium are trading in the lower end of their most recent trading ranges and they, too, are hoping for some buyers to emerge.
On the other hand, the spot price of Platinum breaking thru the $800 dollar level has forced some Hedge Funds to head for the exit. With a lack of any good news to support a rally in this market I expect the sell off to continue. Spot technical levels of support are at $778 but at this juncture, I don’t see these levels of support a concern for holders of Platinum at this time.
For years now, China has repeatedly attempted to steal our intellectual property and I’m sure many of you out there are asking yourselves, how does this happen?
These thefts occur from China’s restriction laws, which requires foreign business to form joint ventures with domestic Chinese companies to sell their goods in China. These ventures often include some type of technology transfer, exposing foreign businesses to theft.
In other words, if you want to do business in China, you need to share all of your secrets so together we can conduct business in China.
All we hear in the news is the fact that China is stealing our technology. Are we so naïve that we expect them not to develop their own technology after we show them how we do it?
If a trade agreement isn’t met by the March 1st deadline, the President will impose a 25 percent import tariff on all Chinese goods entering our country.
What am I missing here? What difference does it make? They already have our secrets. It’s already too late. Why should we now penalize the American consumer by adding costs to what they buy from China.
If we were really smart we would have never agreed to China’s restrictive business laws.
You might be asking yourself how does it affect me?
The U.S. has proposed up to 25% tariffs on $50 billion worth of Chinese imports for what the agency called “harm caused by China’s unreasonable technology transfer policies.”
So in plain English, almost everything imported from China will cost us much more and in the end could have an impact on corporate earnings.
Corporate earnings already have started to decline and forward guidance by analysists has indicated we have seen better days. I guess in the end this could be good news for the Gold investor as a slowing economy and a higher cost of goods will force investors to rethink their equity holdings.
Have a wonderful Monday.
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.