Gold Fails To Stay Above 200-Day Moving Day Average

The Market Gage - Dillon Gage's Precious Metals Newsletter

The attack in Syria and the poor jobs report cannot get gold to stay above its 200-day moving average at $ 1256.25 spot – number that all traders see as a level of support that must be maintained for gold to trade higher.

Subsequently, we are now back to the levels seen before the Syrian attack and the jobs reports were released.

Wall Street gold traders didn’t take the bait and remained silent for the most part during these events.

The dollar and Ten-Year Treasuries are trading sideways, keeping a lid on the price of gold.

Financial advisors and their clients seem content with President Trump’s economic agenda and are pretty comfortable as viewed by volatility levels across asset classes, especially with the dovish tone revealed most recently by the Fed.

At this juncture, with such calm equity markets, we see very few investors buying volatility protection against a downturn in the market – So much so, that the Implied Stock Volatility index is near historic lows. Still ahead, is the European elections and the continued turmoil in Congress on whatever President Trump puts before them. I can’t see the volatility remaining this low for too long as Russia and Iran are flexing their muscles with comments that they will respond with force to any future American aggression.

One spark, one trigger point can move our calm equity markets into a tailspin and give the price of gold a boost as witnessed last week with the Syrian attack. We will have to wait and see if the equity market can keep its rally alive, but I for one believe all the news of late is just the calm before the storm. As one financial advisor put it, “At this time I’m taking a cautious approach and asking my clients for their risk tolerance levels. Then I am moving forward protecting their profits realized since the election in the event something happens. Smart investors ride their profits and put scaling stop losses to protect what they already earned.” Sound advice for sure.

So today we watch the dollar and the treasuries as those two markets are the driving force for any future price movement in our metal markets ahead.

In the meantime:

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.