Gold Holding On Lower Dollar

The Market Gage - Gold is Elemental

Friday was a quadruple witching day (Quadruple witching happens when three related classes of options and futures contracts expire, along with the individual stock futures options) causing one-day expected volatility in many markets and putting unexpected pressure on the price of Gold.

On Friday, the U.S. Dollar was seen trading on the high end of its most recent trading range and the Ten-Year Treasury yields got a nice boost up on Friday but not near its most recent highs. This caused selling in our markets.

Today, the U.S. dollar is slightly lower, hovering around the 90 figure once again keeping the price of Gold virtually unchanged.

This week, we await the decision from the Feds on the March rate hike. A rise in rates is as certain as death and taxes. The question remains how many more rate hikes will occur this year.

Chart technicians are focusing on the $1,300 dollar level and the 200-day moving average at $1,291. A rally in the U.S. dollar will put pressure on the price of Gold at those levels. I DON’T see this happening, but if the longs get nervous and see the rug getting pulled out from under them, anything can happen. Watching the U.S. Dollar is KEY to further price movements in Gold.

A story that came across my desk and caught my eye is the EU potentially targeting Precious Metal tariffs in retaliation to the President’s tariffs.

This story came from Precious Metals Association of North America. (Formerly known as the Silver Users Association)

In an advisory sent out to its members, PMANA reported that the European Union has proposed tariffs on precious metals jewelry, if President Trump follows through with increased tariffs on EU steel and aluminum. Friday morning, Brussels released two lists of American products that would be targeted by the European Union. Both lists were submitted to the World Trade Organization according to WTO guidelines.

According to the WTO rules, immediate retaliation by the EU is only allowed on certain steel and aluminum items. After three years, actions are allowed on additional goods, which is why the EU targeted Precious Metals in its secondary list.

PMANA indicated they will continue to monitor the situation and announce any trade actions that could be instituted.

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.