Patience Could Reward For Gold Investors

Gold and Silver Market Insights

Terrific job number this morning adding 313,000 jobs in February. Eight hundred thousand people have entered the work force. All impressive news for a stronger equity market.

Second day of a declining VIX Index, a stronger dollar and higher treasury yields keeping the price of Gold underwater.

Wall Street Gold traders nowhere to be found in this market as most have changed gears and are trading currencies as they claim they don’t see any chance of a sustained Gold rally anytime soon.

North Koreas Kim Jung Un and President Trump have seemed to have shaken hands over the news wires as they plan to meet each other before May.

With a booming economy, wage growth and strong job numbers many traders can’t defend an argument that four rate hikes will be put in place this year. BUT I CAN !

How much positive news on the economy can a market absorb without the equity markets going to the outer stratosphere? The financial advisors I speak with daily indicate that the majority of their clients are happy with their current holdings. But with all the good news on the economy what happens if the equity market doesn’t take a new leg up and make new historic highs? One would expect it should.

What does that indicate? And what happens if the GDP number comes in lower than expected? Let’s not forget that the most recent numbers on household debt is increasing and making new historic highs every time they run that survey. Our countries debt is out of control and we STILL haven’t addressed the healthcare issue.

And if higher interest rates are in the cards why aren’t the ten year treasury yields making new highs. What happened to all the worries about the Ten-Year yields above three percent. The dollar seems a little stronger, but that too isn’t making new highs.

With “ALL” this negative news in the Gold market, why isn’t the price of Gold making new lows? Anyone have an answer?

Let’s absorb all this data and really listen to what the markets are telling us. For a moment let’s turn off the television and take a break from listening to all the cheerleaders on the business news channels.

There is a real danger in the markets right now, it’s called “complacency.” When the pendulum is taken so far to the right and has no more room to move, what happens? It moves strongly in the opposite direction. The data is indicating that the markets are tired and have little or no more room to the upside.

If there was more room to the upside why haven’t we gotten there? No new highs for the equity markets, no
new highs for the dollar and no highs on treasury yields. And most important no new lows in the price of Gold.

Patience my friends. The data is indicating our time is near.

Have a wonderful Friday.

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.