Gold Bores Investors

The Market Gage - Gold is Elemental

The lack of interest in the Gold market by traders, speculators and of course investors continues to keep the price of Gold seemingly locked in place. When the market gets this boring you will start to see some traders sell into the weakness knowing a rally is not in the cards. Typically these are day traders just looking to short the market trying to pick up a few shekels.

The Silver market is still inundated with a tremendous amount of silver on the shelves of warehouses and dealers vaults, keeping the price under pressure.

The price of Palladium continues to decline as funds and other speculators head for the exits. Speculators have reduced their net long positions by almost 2,300 contracts last week. Palladium ETFs are also in liquidation mode as holdings are now hitting a new low for the year. The threat of a 20 percent tariff by the President on imported automobiles is the main driver of lower prices.

The price of Platinum continues to be under pressure as the demand for diesel engines fades away. Now adding fuel to the fire is a report that a German Court has approved plans by some cities to ban older diesel cars. Hard to find any good news in the PGM market these days.

Greece Gets Relief

Eurozone creditors reach ‘historic’ deal on Greek debt relief.

A story in the financial times on Friday reported that the Eurozone governments have brokered a long-awaited debt relief deal for Greece, pushing back repayment deadlines on almost €100bn of bailout loans as the country prepares to exit its era of financial rescue programs.

Finance ministers hammered out the final points of an agreement in more than six hours of talks that stretched into the night in Luxembourg on Thursday. The deal was immediately hailed by governments as a “historic” step after eight years in which Greece has undergone three bailout programs and suffered the worst depression of any European economy in modern times.

“It is an exceptional moment,” said Pierre Moscovici, the EU’s economy commissioner, after the meeting. “The Greek crisis ends here tonight in Luxembourg.” The debt deal sent a ripple of enthusiasm through Greek financial markets on Friday. The yield on the thinly traded Greek 10-year bond dipped by 22 basis points to 4.1 per cent, its lowest for more than a month. Meanwhile the Athens composite index of leading Greek equities rose 2.5 per cent, led by bank stocks.

The agreement means the repayment of €96bn of bailout loans, about 40 per cent of the total Greece needs to repay the Eurozone over the coming decades, will be pushed back 10 years. The earliest repayment deadlines shift from 2023 to 2033. The plan also includes increasing the size of Greece’s final installment of bailout money to help build up cash reserves that can sustain it over the months to come.

Sounds to me as if this is just another attempt to kick the can down the road avoiding a debt crisis and is no different than what we are doing here in the States ignoring our country’s debt.

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.