A mixed bag of financial indicators keeping the price of Gold in slightly positive territory this morning. The markets are awaiting to hear the minutes from the last Fed meeting at 2pm EST. Traders are interested to see what their thoughts were on expected inflation and anticipated rate hikes in the coming months ahead.
The U.S. Ten Year Yield interest rate failing to stay above the 2.9 percent level giving the price of Gold a boost. The price of Silver is following the same path as Gold. After the most recent rally in Platinum and Palladium we are seeing some profit taking emerging this morning but I believe this is the market just taking a breather before trading higher once again.
So in the meantime, Wall Street traders along with their algorithmic programmers are preparing their strategies and getting ready for action as soon as the FED news is released today.
Navigating the Maze of Economic Indicators
I remember hearing someone say. “This is the largest individual tax cut in our country’s history.” Thank you it’s appreciated, BUT now you want to add a gas tax and an internet consumer tax?
Some economists claim that if the gas tax is imposed it will wipe out any benefit received in the individual tax mandate.
What everyone seems to be missing is the impact of higher interest rates on the consumer, which will slow down the economy in a big way. And if the economy slows down government tax revenues will suffer and the country’s deficit will increase. Not helping matters is the latest U.S. budget, increasing government spending instead of reducing government programs.
Let’s call it like we see it. Right now, the corporate tax cut is the the only vehicle keeping the equity markets from falling. And if the consumer feels the pain of higher interest rates, the economy will slow and the equity market party could be over.
In February, if inflation picks up steam, another 10 percent drop in the Dow could occur. If that happens, it could reduce GDP by 7/10 of a percent. Some economists claim a 20 percent drop in equities along with an aggressive Fed interest rate policy trying to keep inflation in check, could put our country into a recession.
So if that happens, where will the average investor put his or her cash?
The obvious answer for many will be government bonds, but what about having a strong diversified portfolio that includes physical precious metals? One of the recommendations made by some financial professionals is an investment in physical precious metals. Five or ten percent of the portfolio is a good start for a truly balanced portfolio, they claim.
As authorized trading members of many of the Sovereign Mints around the globe, Dillon Gage always carries a significant amount of inventory to meet the needs of our clients.
With so many uncertainties facing our financial future, wouldn’t an investment in physical precious metals make sense?
We are here to help.
Have a wonderful Wednesday.
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.