Good news for the Gold market as we see the momentum in Ten-Year Yields heading in the opposite direction of late, now softening up. Many traders were expecting the momentum to continue towards the 3 percent figure but as we hear conflicting comments from different Fed board members the market interprets that as less than aggressive rate policy going forward.
The U.S. Dollar virtually unchanged this morning.
Equities also enjoying the good news, as they are called to open up over 100 points this morning.
Some Wall Street Gold traders claim, with the pull back in the dollar and softening Treasury yields all four metals will build a base here with higher prices ahead. The jury is still out whether this rally is sustainable. Any turn around in the Ten year , (and there is always that possibility the way the markets have been reacting) could derail this Gold rally. Unfortunately, I disagree with my friends on the Street. I think this rally will be short lived.
Now that it seems everyone has been introduced to the Cryptocurrency craze as an investor or just an outsider, where do we go from here?
True, these markets have had wild volatility and some countries have banned some of them but whether you like these products or not they are here to stay.
Just on Friday, the Financial Times reported that the Bank of America said these products can cause a disruption to their business model if they become more popular. BofA went on to say, “The widespread adoption of new technologies, including internet services, cryptocurrencies and payment systems, could require substantial expenditures to modify or adapt our existing products and services,” The document also said cryptocurrencies could make it more difficult for the bank to comply with regulations by impairing its ability to track the movement of customer funds.
Regulators have also issued warnings. The Bank for International Settlements has described bitcoin as “a combination of a bubble, a Ponzi scheme and an environmental disaster.” Mario Draghi, president of the European Central Bank, has said cryptocurrencies are “very risky assets”.
Yet the major exchanges here in the States still have cryptocurrencies as active contracts and according to some news stories, there will be derivative products being introduced in the near future.
There are many interesting developments in this arena including Bitcoin ATM’s. Currently there are 250 ATM’s across the country operated by Coinsource. The company will attempt to leverage the enormous growth of Bitcoin by providing an easy and secure way for individuals to convert Bitcoin into cash and visa-versa.
If you own a cellphone you can open a digital wallet on the Blockchain network where you can buy, sell and store your Bitcoins.
So as the Banks continue to try to figure out if these products should be part of their business model, it will take involvement by the regulators first to set parameters and regulations before the banks can adapt these products into their fold. They might as well get started because Cryptocurrencies and new developments in Blockchain technologies are here to stay.
Have a wonderful Monday.
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.