The Dollar index is firming up and trading in a tight range overnight giving some Gold investors hope that a strong rally in the dollar will not materialize.
Overnight, physical buying emerged out of Europe, especially in Germany and France we are told, bringing the spot price of Gold to a high of $ 1288.70. Slowly moving towards the $ 1300-dollar level again.
Spot Gold technical support levels a bit away at $ 1275, looking at this time unlikely to be tested.
Wall Street Gold traders still holding on to their short positions from the $ 1318-dollar level, have said that if the market reaches the $ 1295 spot level they will likely start to cover and take their
profits off the table. In the meantime, they are just enjoying the ride to the downside.
One prominent Wall Street Gold Trader said to me this morning, “I would be very surprised to see the price of Gold test the $1,300 dollar level again. I just don t see a catalyst emerging that can move
the price back up to that level again.”
It looks like a US-China trade deal is forthcoming and can reduce the chance that investors will look to Gold as a safe haven.
Just looking at the Global Bond Market this morning and seeing every Ten Year Bond is up, and yields are lowering for the day. Here are Ten Year Bond Stats:
| Belgium | 0.6590 | 0.6500 | 13:45 | 0.6590 | 13:45 | 0.6894 | 0.6900 | 0.6450 | 0.6868 | -0.0278 |
| German | 0.1400 | 0.1400 | 13:40 | 0.1400 | 13:40 | 0.1662 | 0.1662 | 0.1300 | 0.1651 | -0.0251 |
| Danish | 0.2470 | 0.2395 | 13:00 | 0.2432 | 13:00 | 0.2730 | 0.2730 | 0.2432 | 0.2731 | -0.0298 |
| Spanish | 1.1390 | 1.1300 | 13:44 | 1.1390 | 13:44 | 1.1559 | 1.1600 | 1.1170 | 1.1559 | -0.0169 |
| French | 0.5300 | 0.5200 | 13:41 | 0.5250 | 13:41 | 0.5605 | 0.5607 | 0.5200 | 0.5606 | -0.0356 |
| Italian | 2.6570 | 2.6500 | 13:44 | 2.6570 | 13:44 | 2.6868 | 2.7300 | 2.6540 | 2.6869 | -0.0299 |
| Dutch | 0.2440 | 0.2400 | 13:45 | 0.2440 | 13:45 | 0.2688 | 0.2700 | 0.2330 | 0.2689 | -0.0249 |
| U.S. Treasury | 2.7133 | 2.7101 | 13:45 | 2.7117 | 13:45 | 2.7196 | 2.7218 | 2.6992 | 2.7169 | -0.0052 |
| U.K. | 1.2479 | 1.2479 | 13:45 | 1.2458 | 13:45 | 1.2848 | 1.2857 | 1.2450 | 1.2849 | -0.0391 |
So, with Equity Futures down a bit overnight, higher bond prices, and a steadying U S Dollar, it makes sense that the price of Gold is trading a little higher this morning.
Palladium prices are holding up relatively well as the backwardation continues showing a steady EFP at minus 50 minus 30.
Have a wonderful Wednesday.
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.