It’s all over the news, the President wants to add more tariffs. If he follows through, the real losers will be the American consumer.
It’s true that wages are rising, but most economists predict it will not offset the increased cost of goods for the average American.
The jury is still out if these tariffs are a good thing. Without getting into a political discussion, the bottom line is these added costs will be inflationary. This will cause the Fed to take a more aggressive stance and raise rates at a faster clip to try and stay ahead of the curve.
So, higher interest rates will keep the pressure on the price of Gold. Let’s not forget that we have enjoyed 35 years of low inflation and low interest rates. All good for the Gold investor.
One has to believe that if this trade war has a favorable outcome and doesn’t escalate, it should give the price of Gold a “major” boost.
Because of the stronger dollar and higher interest rates, the price of Gold cannot keep its head above the $1,200 dollar level. One positive note is that even with all the negative news the price of Gold is holding up pretty well. The price hasn’t gone back to the most recent lows hit a few weeks ago at the $1,160 level.
So as an investor, we will take a wait and see posture until we get a clearer picture of the outcome of these trade discussions.
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.