Don’t fall asleep at your post. You might just be missing some thing you would regret.
Here are some highlights to share with my readers that could be significant in the price of gold in the months to come.
If you looked at the price of gold the first of the year gold was trading at $1,148. Today we are $100 dollars higher. That’s an 8 percent increase in just 53 days.
Today if you look at the gold ETF, we have just set a new high holdings in the fund for 2017 at 65.2 million ounces. As I indicated in previous comments, I believe this it’s all commercial inflows, with very little retail investor interest. Most retail interest is still in equities.
So, I’ll ask the question again, what do the commodity fund managers know that we don’t?
French National Front political party leader Marine Le Pen has increased her lead in the first round of France’s presidential election. According to the polls, Ms. Le Pen is expected to win the first round of the presidential election with an estimated 27.5 percent of the vote. Doesn’t sound like a convincing number but in the first round there are many participants. If she wins there will be a runoff in May to see who will be the next President of France. The reason this is significant is Ms. Le Pen is a far right wing candidate who said if elected she will put together a referendum for France to exit the EU. Yes she is the underdog and she has an uphill battle in a socialist environment but who would have thought that Trump has a chance facing 15 candidates just a year ago?
Some Wall street gold traders seemed to have called this one correctly. If you remember in my previous comments, some indicated that they liked gold here and expected the rally to be slow going but to continue. They started accumulating gold at the $1,220 level and only would bail out if gold broke thru the 100-day moving average which at the time was $1,215.
My technical friends want some press also indicating that the next level of resistance in the price of gold isn’t till the $1,262 level.
Current CME WATCH TOOL indicates the chance of a rate hike at the next FOMC meeting in March is at 22 percent.
The Dollar Index now down 32 basis points on the day and the yield on 10 year treasuries are in negative territory both helping fuel the rally in gold.
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.