Gold Continues Up on Last Week’s Jobs Report

The Market Gage - Dillon Gage's Precious Metals Newsletter

We’ve witnessed gold up almost 5 percent this week after the disappointing jobs number last Friday.

Hitting the news wires yesterday was a story about billionaire George Soros getting back in the gold market. Soros Fund Management, which manages $30 billion for Mr. Soros and his family, sold equities and bought gold and mining shares. Mr. Soros indicates that he sees a bleak outlook for the global economy, and has directed some of his companies’ investments into the metals arena due to his concerns about political issues in China and Europe.

We also wake up this morning to see the gold ETF hitting a new high for 2016 at 1918 tons, approximately
61.3 million ounces held.

So this morning I once again turn to the financial advisors to get their take on the continued investment by their clients into the gold ETFs. I found this interesting, but not surprising. The majority of this type of investor is the baby boomer generation and collectively they are looking for better yields on their investments. (Who isn’t?) Their first choice of investments for these folks are bank CDs which unfortunately are paying almost nothing. So where else do they turn looking for better returns? Most have been investing in Blue Chip stocks and are now seeing corporate earnings fall off, so some have decided to diversify a portion of their holdings into gold. Collectively their concerns are about the upcoming presidential election and a U.S. Congress that can’t agree on anything.

So with all the economic and political turmoil they read about around the world, gold shines the brightest to most ETF investors.

Now, my hope is that this rally will translate into more investors turning to physical gold and silver metal instead of investing in the ETF funds.

After all, in the event of a global recession, what would you rather have in YOUR safe deposit box? Physical gold or a piece of paper?

You know my answer.

Have a wonderful Friday.

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.