Walter Pehowich is on vacation today, so our commentary comes from Stephen W. Miller, CEO of Dillon Gage Companies.
Yesterday was a continuation of the markets reflected in our last comments. The precious metals market fell off, with gold trading around $1202.00/oz. Silver is around $15.30/oz and oil is $29.04/barrel.
Retail sales posted a surprising gain with core retail sales rising .6% in contrast to Dec -.3%.
The stock market posted its second day in a row gain of 222 points.
In the energy sector, Russia and Saudi Arabia, Venezuela and Qatar announced a production freeze which holds production at current levels that are on the high side. This shouldn’t impact the supply much at all and didn’t seem to impact the market.
The news is an example of why a long term strategy is so important when dealing with the markets including the precious metals complex.
Markets aren’t mainly supply and demand as before but are highly affected by government central bank activity.
For example, in our last comment we stated that the market activity reflected the belief that bad economic news would push the central banks into more easing causing the stock markets to move higher. Sure enough, the European Central Bank hinted at more easing today.
This “reading of the governmental tea leaves” is what everyone obsesses over in today’s economic world and frankly it is a sad commentary on the current state of economics.
Therefore we go back to the necessity of looking at the long term when making a decision. Over the long haul, gold and silver have retained their value while the dollar has deflated. Just think of four 90% US silver quarters (90% silver dimes, quarters and half dollars were minted up to and including 1964). They were $1 in 1964 but are worth $16 today. A very simple illustration. Certainly there is fluctuation but the trend is always for inflating the basic currency which translates into a higher “relative” gold or silver prices.
So don’t let the markets or news panic you one way or another. Know what is the reality of economics and then plan for the long term or your objective.
Stephen W. Miller founded Dillon Gage in 1976 after a long career in the brokerage industry. Mr. Miller has a breadth of experience from company management to investment banking services, leading NASDAQ small cap market companies through both first and second tier financing, to taking several organizations through the successful completion of their initial public offering. Mr. Miller and Dillon Gage Inc. have been members of the Chicago Board of Trade and the New York Mercantile Exchange. Mr. Miller is also the co-founder and President of HELPS International.
Disclaimer: This editorial has been prepared by Steve Miller 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.