Gold Under Pressure As Dollar Index Aims At 101

The Market Gage - Dillon Gage's Precious Metals Newsletter

The price of gold this morning under pressure as the dollar index approaches the 101 level again and ten year bonds yields advance. At the time of this report the price of gold is trading below the most recent support level at $1,128 and approaching a double bottom in the charts at $1,222. If the selloff continues, Wall Street gold traders tell me that they will be watching for the 100-day moving average at spot $1,216.25 before jumping back into the market. Some indicated this morning that they are happy with their current long position in the market, but see no reason at this level to add any more on. My take is, if the 100-day moving average is violated selling will accelerate bringing new shorts into the market place and the Wall Street longs will have to cover quickly.

Keeping the price of Gold from pulling back further has been the continued support in the Gold ETF arena.
Friday we saw an increase of over 400,000 ounces into the funds. Seems like all commodity fund activity.
Financial advisors still see little or no action by retail investors in the ETF market. Retail investors love affair with equities continues as the Dow Industrial Average looking at a higher opening this morning.

Refiners reporting steady demand from wholesalers and retail coin shops report decent store traffic.

The price of silver seems to have a mind of her own, happy with just hanging around the $18 dollar level. In the event we see a selloff in the gold down to its support levels, silver should follow. My technical friends tell me there is no support level to share with us in silver until $ 17.48 level is met in the March contract.

With the equities so strong this morning, I expect that the first level of support to be tested later today.
I will be watching closely the action in the dollar and ten year treasury yields as they both seem to move
the price of gold every step of the way.

Have a wonderful Monday.

Disclaimer: This editorial has been prepared by Walter Pehowich of Dillon Gage Metals. This document is for information and thought-provoking purposes only and does not purport to predict or forecast actual results. It is not, and should not be regarded as investment advice or as a recommendation regarding any particular security, commodity or course of action. Opinions expressed herein are current opinions as of the date appearing in this editorial only and are subject to change without notice and cannot be attributable to Dillon Gage. Reasonable people may disagree about the opinions expressed herein. In the event any of the assumptions used herein do not come to fruition, results are likely to vary substantially. All investments entail risks. There is no guarantee that investment strategies will achieve the desired results under all market conditions and each investor should evaluate its ability to invest for a long term especially during periods of a market downturn. 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. This information is provided with the understanding that with respect to the opinions provided herein, that you will make your own independent decision with respect to any course of action in connection herewith and as to whether such course of action is appropriate or proper based on your own judgment, and that you are capable of understanding and assessing the merits of a course of action. You may not rely on the statements contained herein. Dillon Gage Metals shall not have any liability for any damages of any kind whatsoever relating to this editorial. You should consult your advisors with respect to these areas. By posting this editorial, you acknowledge, understand and accept this disclaimer.