Quiet Overnight Trading Keeps Gold Static

The Market Gage - Dillon Gage's Precious Metals Newsletter

Quiet overnight trading abroad is keeping the price of Gold virtually
unchanged. Some Wall Street gold traders long from the $1,232 area
are hoping for this rally to continue and would be satisfied heading
for the exits around the $1,248- $1,252 area. In the event the price of Gold
sells off, they will be watching the $1,232 level on the downside. The reason I mention these fellows is that the amount of volume they transmit into the market can influence the price.

Strong outflows in the Silver ETF yesterday are keeping a lid on that market for the time being.

The dollar and U.S. Treasury yields flat, not effecting the price of Gold either way this morning.

Over the pond:

Government Bonds anyone? Let’s all dig into our pockets, as Greece, for the first time in three years, is going to be offering 5-year bonds in a week or two. I find this interesting with all the past problems Greece has had. I guess it’s a good move for Greece as much of the EU’s sovereign debt is producing negative yields. Last week, an 813 euro auction of 13-week treasury bills paid 2.33 percent.
These short term bonds seem to be attracting international investment; after all, if anything happens to Greece economically, you know Papa Germany will always come to the rescue. (Reminder: Greece had to be bailed out three times in the past seven years and the jury is still out on whether more will be needed in the future.) So I think I’ll just keep my money on this side of the pond, Thank You.

Things are starting to get ugly between Britain and France. The President of France, Emmanuel Macron, is spearheading a plan to lure London Banks and Financial Service companies to France, promising lower taxes after the Brexit is completed. It seems that some UK institutions are afraid that they will be limited in what they can do with the EU community once they leave. France on the other hand is setting up shop with incentives and projections on how much better off these companies will be as a member of France and its European economic community.

In the news:

The Wall Street Journal reported that the price of Bitcoin fell below $2,000 dollars this past weekend
and traded as low as $1,836. As of today, however, it is back in the $2,300s. This volatility is likely to keep BitCoin and other crypto-currencies in the news.

Where else will blockchain technology take us remains to be seen, but for now it is one of the fastest growing segments of interest to individuals and large institutional powerhouses alike. We promise to keep you posted.

On our shores:

Yesterday, the Republicans released a budget resolution that would dramatically reshape our government, implementing over 200 billion dollars in cuts with hopes of using these cuts as a way to justify reducing our corporate and individual tax basis.

The bill’s components include repealing Obamacare, reducing some social welfare programs, cutting some unfavorable financial regulations and eliminating some of the Obama top executive orders.

This bill they say, and who believes it will happen, will put into effect hundreds of billions of dollars in mandatory spending cuts and balances the U.S. budget in ten years.

If you believe that, I own a bridge from Brooklyn to Manhattan that I’m offering to anyone that can come up with a dollar.

Treasury Secretary Steve Mnuchin and House Speaker Paul Ryan are still at odds on how to make the tax cuts revenue neutral. I wish them luck on that endeavor.

Overall, it looks like the Republicans are desperate to get something done that they can hang their hat because of late they can’t agree on anything and are looking like a bunch of failures to the American people.

In the end both parties need to come together with a plan in the fall to avoid a possible government shut down. GOLD ANYONE?

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 advisers with respect to these areas. By posting this editorial, you acknowledge, understand and accept this disclaimer.