Global Bond Yields Boosting Gold

The Market Gage - Dillon Gage's Precious Metals Newsletter

Lower Ten-year Bond yields across the globe are giving the price of gold a boost this morning as gold is knocking on the door of the next resistance level at $1,232 in the August contract. This was the level that the Wall Street traders were looking for as they claim we need to settle above this level for the rally to continue.

The Dollar Index looking weak, hovering just over the 95 level, after trading down to 95.18 the lowest level seen since September 2016. Still far away from last year’s low hit on May 2nd at 91.91. If you are interested, Gold was trading around $1,300 dollars when the low in the Dollar Index was met.

Silver ETFs seem to be the metal of choice for the equity investor as the inflows into the funds continue. Currently, a total of almost 677 million ounces are held in the Silver ETF funds.

Physical dealers still reporting decent demand for silver products any time the market dips below $16.00. As I hear quite often when speaking to Financial advisors, the story they tell is that most investors would rather buy Silver because they feel it’s a better investment with the potential to triple in value whereas for gold to triple we would have to have a total economic meltdown.

Over the Pond

Not so fast you ain’t getting away that easy, says the EU…

Just like any contested divorce, Britain will have to pay the EU a substantial amount of money to leave the EU. The EU will press Britain to pay its share of unpaid bills and liabilities as Britain is expected to seek a share of EU assets. Currently, Britain’s liabilities may exceed 100 billion Euro. (If that’s the case, I want to be one of the lawyers working on those negotiations.)

With the exit scheduled for March 2019, an arm wrestling negotiation is expected and seen as a stumbling block to hold that date as Bible. There seems to be so much at stake that it’s my belief that date will have to be delayed as it’s seen that both sides have begun to dig in their heels.

If the talks are delayed, EU member states would need to unanimously agree to an extension of talks beyond two years under Article 50 of the EU rulebook. The talks are expected to be tough, because EU leaders may want to make an example of Britain in order to discourage others from leaving.

As the saying goes, somebody has to go first…..

Back to our shores

How ironic, after we ran the story of Bit Coin on Friday, later that day, a man was seen a row or two behind the Chairwoman Janet Yellen on Capitol Hill holding up a sign that said “Buy Bitcoin.” The guy is now a celebrity in the Bitcoin community. Within hours, this guy received almost $16,000 dollars in donations. Most were small donations, but he did receive three donations worth $2,400 from three bit coin “Whales” as they are called, as each one of those donations were equal to one Bit Coin.

The Fed

Friday’s economics figures were a blow to all the “hawks” on the Federal Reserve Board. Looking at the FOMC Watch Tool today, it gives the chance of a rate at this month’s Fed meeting on July 26 at only 3 percent. Also, Friday’s economic numbers have put a damper on a September rate hike showing only an 8 percent chance. And for those who like to follow this data, it’s not ’til December 2017 where we see a 43 percent chance of the next rate hike. So to all the Hawks on the Fed Board, no more comments until the DECEMBER meeting please.

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 advisers with respect to these areas. By posting this editorial, you acknowledge, understand and accept this disclaimer.