Mixed Bag Keeps Gold Stagnant

The Market Gage - Dillon Gage's Precious Metals Newsletter

A mixed bag of indicators to end the week keeping the price of gold virtually unchanged.

A weaker dollar and stronger Ten yield Treasuries sending mixed signals to the market.

Equities seemed to have flattened out, looking for some news for direction.

The CME Fed Watch Tool targeting a rate hike at the next Fed meeting in June at 78.5 percent up from 64.6 percent a day ago.

Platinum Market Overview for 2017

The price of Platinum started the year around the $930 area. Since hitting a high of over $1,030 dollars at the end of February, the price for the most part has been all over the charts. Currently the price of Platinum in the most active CME contract is trading at $ 944.00 .

Platinum ETF holdings in the last ten days have increased by 91,000 ounces. CME Platinum Warehouse stocks currently at 95,000 ounces registered and 130,000 eligible.

This was Platinum week in London where a lot of comments were made by Mining CEOs. The Chief Executive Chris Griffith of the world’s largest platinum miner, Anglo American Platinum, told Reuters on Tuesday, “Policy uncertainty in South Africa and low commodity prices are hurting investment in the mining sector and will lead to further job losses. The miners are awaiting a release of the South African Mining Charter filled with regulations addressing imbalances in South Africa’s past apartheid rule which requires miners to keep black ownership at 26 percent. Uncertainty is dreadful for investment.”

Sixty percent of the industry is losing money and more jobs are at risk. Amplats has cut 15,000 jobs over the last four years and smaller rival Lonmin fired about 15 percent of its staff in 2016. In the end, he expects more mines to close if prices fail to rise.

Currency issues are also facing the miners with the Rand strengthening against the U S Dollar which raises operating costs.

Platinum has many uses. Jewelry, auto catalysts, many industrial applications as well as medical devises. If this administration fails to get a corporate tax cut in place and the economy slows down, all the areas of Platinum consumption will be effected.

Reuters reports Platinum prices were higher last year, but still near eight year lows despite expectations of a sixth year supply deficit. Two questions remain:, If the price of Platinum falls, at what price does it become an issue for the miners? And if the demand continues to exceed the supply, at what price point might the price of Platinum turn around?

Sorry I have no answers on this one, but it will be an interesting market to watch.

Have a wonderful Friday.

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.