Strong Dollar & GDP Pressure Gold

The Market Gage - Dillon Gage's Precious Metals Newsletter

The price of Gold under continued pressure this morning as the U,S, Dollar continues to climb. Currently the U.S. Dollar is trading over the 95 handle, highest level in over three months.

The U.S. economy grew faster than expected in the third quarter, increasing to three percent. U.S. Economists were expecting a number around 2.6 percent. So this number comes as a surprise to many especially after experiencing three hurricanes.

And if the proposed tax cut comes through, some predict 4 percent growth is not out of the question.

Corporate earnings results continue to please Wall Street investors. Just look at these three tech stocks: Amazon, Alphabet and Microsoft, all up huge today after reporting their earnings.

It seems all markets are expecting tax cut to happen. If it fails I expect the price of Gold to rally significantly off the news. Otherwise in the short term, we must hold the $1,261 level in Gold and $16.48 in the price of Silver.

Another Offering From Tech’s Brave New World

Since we strive to help you stay on top of anything new in our neck of the financial woods, I wanted to share my thoughts on a new product that’s out there. Almost everyone has heard of an IPO (initial public offering), but how many of you out there has ever heard of an ICO (initial coin offering)?

An initial coin offering is similar to an initial public offering except you receive a new digital currency instead of a share of stock.

Currently, these currencies are non-regulated. Most of the investors buying these products seem to be looking for the next big crypto score to emerge so that they can possibly cash in big.

The new world of cryptocurrencies has taken the market by storm. The most popular cryptocurrency, Bitcoin, has soared to over $6,000 dollars in the past few days, now six times its value this year alone.

Last I looked on Wednesday, the two largest cryptocurrencies listed, Bitcoin and Ethereum, had a market cap of 94 billion dollars and 28 billion dollars respectively. Looking at the top ten cryptocurrencies, their combined market cap is now approaching 146 billion dollars.

But what about ICOs? A few months ago, Ethereum’s co-founder said ICO’s are “ticking time bombs. There’s an over-tokenization of things as companies are issuing tokens when the same tasks can be achieved with existing Blockchains. People are being blinded by fast and easy money.”

ICOs have had their problems. Earlier in the year, a hacker stole about 7.4 million during a recent Ethereum ICO by tricking buyers into sending their money to the wrong address. Some experts warn that ICOs make it too easy for scammers to run Ponzi schemes against naïve investors and the almost magical money-making ability of ICOs has others warning of a potential bubble. Sorry no FDIC insurance on this playing field.

Since ICOs are intended to raise money quickly, they bypass the strictly regulated fund-raising process that’s typically required by banks or venture capitalists, leaving investors exposed to more risk.

But please don’t confuse ICOs or cryptocurrencies with Blockchain, the next greatest thing since sliced bread.

The Blockchain is an incorruptible digital ledger of economic transactions that can be programmed to record not just financial transactions but virtually everything of value.” That’s why this technology is invaluable to everyone.

Have a wonderful Friday.

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.