At these levels, the price of Gold is seemingly building a foundation and I expect that in short order the price of Gold will start to move higher and test the $1,303 level of resistance once again.
Over the last couple of weeks, we have seen inflows into the Gold ETFs. All over the globe we are experiencing an economic slowdown, prompting investors to look for alternative investments to balance their portfolios.
This is the kind of news that could prompt Fed members to think twice before raising rates at the next Fed meeting. Reducing the balance sheet also comes into question. I’m sure this will be the major topic at the next Fed meeting.
In the last seven business days, there has been a sharp increase of inflows into the Platinum ETFs. Some PGM traders on the street believe that the price of Platinum has bottomed out. Looking at the amount of new investors buying the Platinum ETFs, they too have taken up the cause.
The debt bells are ringing.
Is anyone in Washington listening?
One of the biggest discussions at the conference in Davos has been the global debt crisis. Global debt is at record levels and growing.
It’s no different here. The U.S. can’t keep borrowing for everything we believe that there is a need for; not to mention, no one in Washington has the guts to address our ever-growing entitlement crisis.
On Wednesday, Fitch Ratings’ new Global Government Debt Chart Book reported that government global debt has hit a record 66 trillion, 80 percent of global GDP. “Government debt levels are high, leaving many countries poorly positioned for financial tightening as global interest rates begin to move higher,” James McCormack, Fitch’s global head of sovereign ratings, said in a statement to CNBC. The Fitch representative went on to tell CNBC that the global market debt has stayed fairly stable since 2012, but that hasn’t been the case in the U.S., which has seen its IOUs surge by 44 percent. McCormack also noted that the total U.S. debt is nearly 10 times the size of France, Germany, Italy and the U.K. combined.
I just opened my window and yelled, “Is there anyone out there concerned?”
So where do we go from here? I asked two economists that work for firms on the street and they both indicated that its already too late. One person said, “The corporate tax cuts were supposed to help and for the most part all it did was to give corporations the ability to buy back their stock. I expect the ones who really need tax relief will not see anything of great significance.”
The other person said, “Going forward, my real concern for this economy will be the enormous cost of healthcare. No one has any idea what the cost will be for the average American. It’s the unknown that concerns me. As a Baby Boomer myself, just the current cost of healthcare has me considering working longer than I expected.”
Well there you have it.
After reading this article, don’t you believe that an investment in physical Gold, as a portion
of a truly diversified portfolio, is a wise choice to protect your investments in the future?
Have a wonderful Friday.
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.