Special Edition: Stronger Dollar Fails to Dent Gold

Despite a stronger dollar and higher US Treasury Yields the price of gold marches forward. The release yesterday of the July Fed minutes seemed to convince many gold investors that the Fed does not have the ammunition to raise rates any time soon.

I found the Chairwoman’s comments interesting in how she described the low rate of inflation. She said, “I attribute the recent slowdown to idiosyncratic or peculiar factors like cheaper wireless service.” Really? Cheaper wireless service is one of the main factors inflation is low? I think she can do better than that.

The Fed has indicated that they always try to be transparent. Well, by announcing you have a 2 percent inflation target and allowing all your members to speak between meetings, you have now put yourself in a corner, taking away any opportunity to raise rates unless inflation gets out of control.

Also with all the issues inside the Trump White House, it seems more and more likely that the President’s agenda with be put on hold or derailed completely.

There doesn’t seem to be any news to rally the stock market from here and any news out of North Korea might force investors to take profits off the table and look for other avenues for their dollars.

We will be listening to our Financial advisors to see if the mood of the retail investors has changed.

Keep an eye on bond prices as I expect that market to see the first inflows of cash if there is a rotation out of stocks for any reason.

Have a wonderful Thursday.

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.