Gold Still Bullish On ETF Support

The Market Gage - Dillon Gage's Precious Metals Newsletter

The strong job report on Friday didn’t change the continued bullish sentiment of the ETF gold investor. This morning we see a new high for 2016 in the Gold ETFs. A few Wall Street Financial advisors indicated today that they expect the strong job number will take some wind out of the sails of the ETF investor. I couldn’t agree more. What I’m looking for is the next catalyst that will bring the Gold market to new highs, but I am have trouble finding one.

I expect for the next week or two the Gold market needs to consolidate a bit at these levels before it can set a new high for 2016. Strong physical demand is still seen in the UK, but I expect that will fizzle out very soon. Far East investors are nowhere to be found according to traders there.

Dialing up my charting friends this morning to give us some levels to watch, (which by the way they also agree some consolidation in price is expected at these levels), tell me that their first level of support in gold is $1,348
and then $1,332. They indicated that the $1,332 level is a must hold otherwise a test of the $1,300 dollar level is back on the table. They do believe there is a sell bias in the market at this time and they expect the market will
test the first level to see if the market can hold there. They expect it will.

Silver needs the help of Gold to maintain her rally and here too there are technical levels to watch. The $19.96 level is the first level of support then $19.68, which is a must-hold level otherwise the market sentiment could change.

I for one believe a SLIGHT pull back is healthy for any bull market and this one is no different. Overall, after seeing a strong recovery on Friday an hour after the job report was issued, higher prices are still in the cards.

On another note: There are over 13 trillion dollars worldwide in government bonds now experiencing negative rates. Strong international investment into the U.S. is driving equity prices higher. With all the bad news out of Europe, investors turn to the U.S. to invest, even with our low yields on government bonds. International investor inflows of cash gives the equity market a false sense of utopia.

Second quarter earnings for the SNP 500 in 2016 begin this week and a decline of -5.6 percent is estimated. If this number comes to fruition, it will be the first time the index has recorded five consecutive quarters of year-over-year declines in earnings since Q3 2008 through Q3 2009.

So with all the uncertainties around the world, physical Gold is an important ingredient in any well balanced portfolio.

What’s in your safe deposit vault or precious metals depository?

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