Stronger Dollar Keeping Gold In Place

Market Gage - Precious Metals Newsletter Impacted by Europeon Markets

Gold technical levels holding their position. A stronger dollar and softer treasury yields are keeping the price of gold in their place.

As we reported on Wednesday, the lower level of the RSI indicator has been met indicating a buy signal to the technical traders who only rely on this information to trade in this market.

Silver CME warehouse stocks continue to climb, now at almost 268 million ounce held. Some refiners still using the exchange to get cash for their outturned product.

Reservations About The U.S. Dollar As The World’s Reserve Currency?

Back in April, the Central Bank of Turkey had decided to bring back its 220 tons of Gold that are held here in the U.S. back to their country. Their largest commercial banks have also requested to have their holdings returned.

On Wednesday, the Turkish Central bank promised they will take steps to strengthen their currency after hitting another record low. Economists there say that Turkey needs sharply higher interest rates to get a grip on inflation and prop up the lira.

It seems Turkey President Erdogan wants this Gold returned to let him trade and finance a currency that doesn’t need to go through an international banking system.

Without going into the political issues facing that nation, will this be the start of others bringing back their holdings?

Central Banks started to repatriate their gold holdings a few years ago. It’s becoming a trend because many believe it’s much wiser to have their Gold reserves in their own country. Germany, the Netherlands and Hungry are bringing their Gold home which indicates they want to limit their own risks when it comes to the U.S. dollar as the world’s reserve currency.

Is this the beginning of the U.S. losing its reserve currency status? Many across the globe are very concerned about the U.S. rising debt issues.

The Chinese have started to trade the renminbi (yuan) backed by Gold and last week, the Chinese said they will be introducing the petro yuan.

Is the future becoming obvious? Will the price of Gold and Oil soon be traded in the Chinese yuan and not in the U.S. dollar?

Will currencies backed by Gold dominate the world’s financial system? If so, does anyone know how high the price of Gold will go?

Interesting to say the least.

Have a wonderful Friday.

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.