First off…here’s today’s market highlights:
- For the second day in a row the gold ETFs have seen inflows, but the stronger dollar and bond yields keeping a cap on the price of gold.
- Disappointing jobs number only up 156,000 after economist expected a number of around 180,000.
- Some domestic refiners reporting strong kilo bar demand heading to the Far East.
- On Monday the United States Mint begins sales of 2017 bullion coins.
Now for my assessment of the markets on a cold Friday morning:
I’m calling this one from a baseball umpire’s perspective: I just call them like I see them.
And I’m not taking any sides. Republican or Democrat. Let’s face it, Donald Trump is not the Wizard of Oz and there is no Dorothy that has to go back to Kansas. What I mean by that is, as we approach Jan 20th, all that might have been put in place with good intentions will SLOW down to a government pace and that would have happened no matter who got into the White House. As the pace slows down the arm wrestling over proposals will start are all over again in both houses.
The EU continues to be a hot spot for terrorist attacks, bank bailouts and negative interest rates. With weak economic data from overseas, what positive data can we expect here that could force the FED to raise rates any time soon?
Will the dollar continue to strengthen, along with higher treasury yields? It’s been all too fast of an increase in my opinion, just off of hopes and dreams. So I expect when everything calms down, the equity market gets back to fundamentals, the dollar comes back to earth and Treasury yields soften, then the price of gold will find new levels of support. Commitment of traders indicates that the non-commercial gold traders are holding a long position, the lowest since February 2016. Some Wall Street gold traders indicate they are comfortable selling into any rally. So let the battle begin.
The U.S. debt continues to grow, reforming Obamacare will take some time and so will re-writing regulations to help the “STREET” going forward. Tax breaks, both corporate and individual, will take some time getting on the books.
Infrastructure plans are being developed which will increase government spending. The so-called 20,000 Dow is within reach – or is it? Most financial advisors I spoke with said the smart money didn’t wait for the 20,000 Dow party. They left town before year end. That might have been the reason the Dow stalled just below the magic number.
So as the party and the thank you tour ends, it’s time for our government officials to roll up their sleeves and get back to work, but I’m afraid it might be a little difficult taking off those fancy cufflinks.
Have a wonderful weekend.
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.