Short-Covering Gold Rally

Gold and Silver Market Insights

A short-covering rally in the price of Gold has created a temporary foundation for the yellow metal. Helping the price to stabilize at these levels is a weaker U.S. Dollar and lower Treasury yields.

I’m told by some Wall Street traders today that they have, for the most part, covered their short positions from the previous support levels of $1,261 in spot. I suspect this is one of the reasons we experienced a rally off the lows just a few days before.

The Palladium / Platinum arb. is alive and well currently trading at a $124 difference in the most active future contracts. Traders I spoke with have no intentions of covering their positions even though I told them that they are making me look bad after I commented that this spread has seen better days. Maybe that’s one reason at 64-years old, I’m still working. LOL.

Equities opened higher this morning and continue to climb, as a tax bill is expected to be voted on early next week.

The Fed

Today is the end of the two-day Fed meeting and the last meeting for the current Fed Chair, Janet Yellen. The Federal Reserve is expected to raise rates a quarter percent today at 2pm. Right after the rate announcement, there will be a press conference, Janet Yellen’s last, before she steps down in February.

The Street expects that the Chairwoman will cover many topics in her press conference, from Bitcoin, to the effects of President Trump’s tax plan, to how she views the Fed’s position going forward into 2018.

Bitcoin The So-called “UNDERLYING” Commodity

Bitcoin value headlines are all over the news channels. But maybe the real headline should be: “Is your Bitcoin investment Safe?”

Just last week, 4,700 Bitcoins worth 75 million dollars were stolen in a hack. And last year, 120,000 Bitcoins (worth 78 million dollars at that time) were stolen from Hong Kong based Bitfinex. When that theft was reported, the price of Bitcoin dropped by 20 percent in just one day.

A precaution in purchasing Bitcoin is to be careful what exchange you use to make your purchase. The advice the pros give is to use an established exchange with a good track record. An interesting note to share is at times order fulfillment is almost impossible as we read at some chat rooms, investors have complained that they cannot get their trades executed. One prominent exchange said they had 331,000 orders in the cue and unable to offset the trades because of lack of product to meet the demand.

So how do you protect your investment? Those in the know recommend you your move them to your own personal wallet and not leave them at exchange where you purchased the Bitcoins. And constantly change your password. But is that enough?

Who do you turn to if you lose everything? NiceHash the exchange that experienced the breach last week is notifying all the other exchanges to be on the lookout. What are we looking for? Does anyone really know?

It’s not like a bar of Gold that could be identifiable by markings and serial numbers.

So, is your investment safe no matter how many precautions you take? Is safety a matter of luck or lack of luck if your Bitcoins are stolen.

Just think, if you bought $100 in Bitcoin in 2011, your investment would now be worth $1.87 million. How could you go to sleep every night wondering if your money will be there in the morning?

The Bitcoin market is getting so much attention that Cybersecurity firm FireEye warned that North Korean hackers are stepping up their attempts to steal Bitcoin in order to support Kim Jong Un’s authoritarian regime.

So once again, as the saying goes “Let the buyer beware.”

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.