Lots of Questions – Is Gold the Answer?

The Market Gage - Dillon Gage's Precious Metals Newsletter

Was the Brexit vote just the tip of the iceberg of things to come? Do you think German Chancellor Angela Merkel is having second thoughts on making a decision last year to allow 1.1 million refugees and migrants into Germany? One would think she does after the message sent by voters in a far-right party in Sunday’s election in Germany. An alternative party that opposes Merkel on her immigration stance came in second over the weekend, sending a message to Merkel that she better think twice before making commitments like that in the future.

Do we know what country will join the UK and start their own referendum to part ways from the European Community? Front Nation leader Marine Le Pen has said that if elected she will hold a referendum on whether France should take the same stance as the UK.

Don’t look now but the Netherlands, Austria, Finland and Hungary have the same plans.

So what does this all mean for the price of gold? (After all, you are reading a gold comment letter.)

If you speak to many financial advisors as I do each week, you’ll hear that for the most part, they report that most of the rally in the equity market is from money being invested from folks over the pond. Does that investment send a strong message that folks in the EU are worried that an investment on their shores is a bad idea? After all, many are looking at negative interest rates and need to find a place to put their money.

More and more people are predicting a breakup of the European Community in the next few years. As I said in previous comments, now that the UK is gone, how can France and Germany support the rest of the countries in the EU? One just has to look as the mess Greece is in.

An article published Monday in Express, a London publication, said, “A Greek crisis could topple the Brussels project, top rating agency warns.” Leading experts at Fitch have warned, “that the stricken Mediterranean country remains the biggest threat to the future of the EU, despite seven years of grueling recession and austerity imposed from Berlin and Brussels.” Athens has the highest debt and unemployment rates in the world and has everyone in the EU asking themselves, why are we continuing to support them?

Debt, the word sounds familiar? What about our debt? (And I’m sure you are as tired of reading about it as I am writing about it.) No one is addressing the problem. Our debt and the debt in countries in the EU is not going away anytime soon.

I can’t remember in the short period of time I’ve been writing for Dillon Gage that I used so many question marks in one daily comment.

So what more do I need to say in today’s comment to paint the picture that owning physical gold is one investment you will be happy to own when the world economies are in shambles?

I am sure you have heard all the wild far away numbers some crazies have predicted in the price of gold? If these stories keep developing maybe they could be right but for the wrong reasons.

After reading all this information I think I’ll change my favorite color to “YELLOW.”

Have a wonderful Wednesday.

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.