Let’s focus on the two precious metals that lately have been grabbing the most attention.
First, palladium. Some supplies are emerging, causing the backwardation to come in a bit. The EFP now is quoted at minus 40 minus 25. This in turn has softened the buyer’s sentiment for the time being.
Just this past December, one-month lease rates were quoted by some dealers at above 30 percent. Since that time, we have slowly come off that high to where we are today, trading at 7 percent.
Some traders see this as an indication that the highs have been met and expect some easing in the price as more supplies hit the shelves. Going forward we still have to keep a close eye on the EFP.
Turning to gold, we find the yellow metal riding a wave of economic concerns. Weakened global manufacturing data is sparking slowdown fears, especially in Germany where the number came in Friday at 44.7 looking for 48, so anything below 50 is a considered a big miss.
This caused a negative yield in the German bund, the first time two years. At the time of this report, the yield it is still slightly negative.
On Friday, U.S. Ten-Year Treasury yields fell to the lowest level in 2019, and today the yield continues to decline on anxiety over future economic growth.
Brexit uncertainties, fresh concerns over lower U.S. economic growth, an overly cautious Federal Reserve and uncertainties on the China negotiations continue to encourage risk-averse investors to diversify their portfolios.
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.