Saudi Purge Boosts Oil & Gold

Market Gage - Precious Metals Newsletter Impacted by Europeon Markets

Walter Pehowich is off today. The Insights are compiled by Dillon Gage analysts.

As we start the week, attention is diverted off of America’s shores.

Over the weekend, oil hit a 2-year high as Saudi Arabia arrested four ministers and 11 princes in an anti-corruption scandal. Oil’s rise in turn boosted precious metals, a bit.

However, the yellow metal is still stuck in that $1,270 to $1,280 rut we mentioned on Friday. As we go to press, gold is at the lower end of the rut, while silver tip-toed upwards this morning and is hovering just below the $17 mark. While platinum holds at $922 and palladium is once again nosing above $1,000.

Turning to Asia, President Trump’s 13-day, five-country tour of Asia continues today in Japan. A focus of his meetings is expected to be how to constrain North Korea’s nuclear agenda, which could inturn prompt more verbal sparring with Kim Jong Un. If rhetoric and tempers flare, watch for safe haven inspired gold buying.

Coming up at the end of this week is the release of November’s Consumer Sentiment Index. It hit a 17 year high in October, resulting in a sell-off of gold. While the chance of setting another record is unlikely, most analysts feel the Index should remain strong.

The Fed

Last week, President Trump announced his choice of a “Dove,” Jerome Powell, for the next Fed Chair. It’s expected that later today, New York Federal Reserve President William Dudley will announce that he will retire from his post in January, that’s six-months earlier than expected. Dudley has been a solid supporter of current Chairwoman Yellen’s gradual, dovish approach to raising rates. So the question of the balance between doves and hawks on the Fed heats up again.

Have a wonderful Monday.

Disclaimer: This editorial has been prepared by a Dillon Gage Metals analyst. 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.