Gold Slides On 10-Year T-Bill Yield

Gold and Silver Market Insights

A lot of news for the market to absorb this morning as Ten-Year treasury yields continue to climb, affecting both the price of Gold and the Equity markets. The U.S. Ten-Year yield is now at 2.85 percent. If you scan around the globe, Ten-Year Bond Yields everywhere are climbing as global interest rates head higher. The Dollar’s position in positive territory is also not helping the yellow metal this morning.

A strong jobs number released this morning gave the Gold longs an immediate migraine as they witnessed the price of Gold drop over $12.00 when the news hit the wires.

The Atlanta Fed this morning said they expect the first quarter growth rate to hit 5.4 percent. Not good news for the Gold bugs as there is nothing worse than an overheating economy where the Feds will be forced to raise interest rates faster than anticipated.

Precious Metal dealers are tired of buying back metal product from clients as some are bidding below melt on Gold products that historically commanded strong premiums.

Bitcoin, the VIX and more

The price of Bitcoin drops below $ 8,000 for the first time since Nov. 2017.Bitcion devaluation in January wiped out 44 Billion in value for the most popular cryptocurrency. On Wednesday, Indian Finance Minister Arun Jaitly warned against criminal activity associated with Cryptocurrencies, and said India would “eliminate the use of Cryptocurrencies in illegitimate activities.”

I’m surprised to see the CBOE VIX index climbing. After all, isn’t all the current economic news positive? Job creation and wages on the rise. Tax cuts good for corporate America and for most individuals. So why are many equity investors getting nervous?

Are they worried about inflation and higher interest rates and an overheated economy? The financial advisors I spoke with this morning said, “It seems so.” So my question to them was, “Why do you think that’s the case?” One advisor said, “There is a hell of a lot of money on the table for my clients and none of them want to give any back. So I’m seeing increasing stop loss orders being placed, so in the event of a sell off, they are protected from giving back more than they want to. My assistant is spending more time adjusting stop loss orders from my clients then he is taking new buy orders.” Interesting to say the least.

So possibly the only winners will be the ones with a good exit strategy and the seniors holding bank CD’S ready for renewal.

One last comment. Higher interest rates will increase our country’s debt, something Washington seems not to care about. This will become a major problem in the years ahead.

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.