Gold Maintains – Dollar Weaker

Market Gage - Precious Metals Market Newsletter

The price of Gold unchanged this morning as a weaker dollar and higher Ten-Year Treasury yields keeps the price of Gold boxed in.

The price of silver seems to be just following what Gold does, as continued surplus of 1,000 ounce bars still seems to an issue for refiners and producers. What they do with this excess inventory in the coming months will be predicated on silver demand. Right now, if the Silver market stays in its current trading range the producers and refiners will have no place to sell their bars (and get a premium) and come first notice day in March, will once again look to the CME to unload their bars as they did this past December.

For those who like to play the Platinum / Palladium Arbitrage, that spread continues to come in forcing traders to exit their current strategy which did them well for a while when that spread widened as the price of Palladium reached for historic highs.

Washington Shutdown>

The government shutdown seems to have little effect on the markets this morning as more positive news on the
economy emerges. Consumers satisfaction with the economy is reported at a 17-year high as 69 percent of those surveyed believe they are in better shape today.

Deutsche Bank reports today that there is a growing relationship between the price of Bitcoin and the VIX, the volatility index commonly known as Wall Street’s “FEAR INDEX.” According to Deutsche Bank’s Global Financial strategist, over the first three weeks of 2018 the correlation between Bitcoin and the VIX has increased dramatically.

I tend to disagree that there is any correlation, because I don’t believe the sophisticated equity investor would be selling stocks to buy Bitcoin, especially now that the rally and the excitement in this Cryptocurrency has been somewhat subdued. The VIX currently trading at an 11 handle down from Friday as the market has absorbed the news on the Government shutdown and seems to care less at this time. I guess we will have to wait to see how long the shutdown lasts and what future effect it will have on the markets.

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.