Gold’s Stellar Rally

Gold's Stellar Rally

A play-by-play analysis.

It took a while for the yields on the 10-Year Treasuries to go over 3 percent. Matter of fact, we got as high as 3.25 percent. That eventually took a toll on Equities. Interestingly enough, the action on Wednesday reveled for the only 3rd time in 20 years when there was significant movement to the downside in Equities, did we see both Treasuries and Equities being sold off at the same time. Some are calling it a disconnect, I must agree.

Yesterday, things were back to normal (sort of) where Equities continued their sell off and Treasury Yields dropped as Bond buyers were plentiful.

At the time of this report, the yield on the Ten-Year Treasury is at 3.15 percent. Quite a move to the downside in the yields to coordinate the selloff in Equities.

Yesterday, the price of Gold had a stellar rally, due to a selloff in Equities and a short covering
rally. It looked like many of the holders of short positions had their stop loss levels triggered as the price of Gold climbed.

Today, we see Equities with green arrows across the globe and the price of Gold off a bit as the Dollar Index and Treasury yields are both a little higher this morning.

Jared Freidman of Redwood Financial Planning told me this morning that he reminds his clients that the daily movements of the markets need to be watched and monitored, but staying on track to accomplish your long term goals and objectives is really the focus.

He went on to say, “Yes, I’m happy the sell off hasn’t continued overnight, but it’s not the positive opening in Equities that matters, it’s where we close at the end of the day. With the wild volatility the market had experienced over the last couple of days, another 500 point move in the Dow either way
is a possibility.”

On the Gold

Now that we have broken out of that stubborn trading range in the price of Gold (over $1,210), I believe it will be imperative that we maintain a good distance away from that number for a few days to have the ability to trade to the next level of resistance. The spot one-hundred day moving average that all the traders will be watching is $1,231. Yesterday, we fell about $5 dollars short from that
significant spot resistance level. If this market wants to keep the rally going we need to have a day that we “settle” above that figure. Let’s see what develops in the next few days.

By the way, interest rates continue to rise, affecting the consumer as we now see mortgages at an 8 year high of 5 percent.

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.