The recent rallies in the Gold and Silver markets are over because of the improving outlook for the global economy. The anticipated trade deal with China and a favorable Brexit outcome are now strong possibilities, so investors are giving up their Gold and Silver holdings for an investment back into the Global Equity Markets.
Just look at some of the Equity Market numbers here in the States and around the globe from the start of the year:
- USA up 11.5 percent
- Germany up 10 percent
- France up 11 percent
- China up 25 percent (Surprisingly)
- Japan up 9 percent
- Brazil up 8 percent
And the Nasdaq has been up for 10 consecutive weeks. This impressive weekly win streak is the longest since 1999.
Increasingly priced into the market now is a Fed that is not just patient, but is actively seeking to do an inflation overshoot, or at least moving in that direction.
One of the influential members of the Fed board, New York Fed President Williams, recently said, “I need to see growth and inflation surprise my forecast to the upside in order for me to justify raising rates this year.”
After hearing comments like that, many economists are predicting no rate hikes this year.
No wonder several Wall Street traders put on short positions in Gold when the market broke thru the major support level at $1,318 last week.
At this point, it will be difficult for the price of Gold to put together a strong rally to the upside and will struggle to hold these levels as the Equity Markets continue their strong move to the upside.
Palladium, the darling of the Metal Markets, is consolidating at these levels as supply risks ease a bit. Some PGM traders said, with seeing the three other Metal markets declining, it should keep the price of Palladium range bound until some significant news emerges.
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.