Treasury Yields Recover Impact Gold

The Market Gage - Dillon Gage's Precious Metals Newsletter

The price of gold taking it on the chin this morning after we see a strong recovery in Treasury Yields and in the Dollar index, after experiencing a multi-year low at 91.01 on Friday.

At the time of this report Equities are up over 100 points attracting money back from safe haven investments last week.

With no news out of North Korea we expect to see the price of gold retreating back to recent support levels. $ 1332 in the December contract is a level some Wall Street traders say we must hold.

One must remember these markets can change on a dime if another missile is launched out of North Korea.

Over the Pond

The ECB kept its benchmark interest rate on changed Thursday and said it stands at the ready to increase its asset purchase program if needed.

European Central Bank President Mario Draghi said low inflation rates meant that a substantial degree of Monetary policy remained necessary until end of 2017. Draghi went on to say that the status of its Bond buying program with be discussed in depth at its meeting in October.

The Fed

As much as I’m not a fan of the Fed Chairwoman Janet Yellen, because of her allowing a “loose lips” policy by her board members between meetings, I have to call it as I see it and report on her record. The Chairwoman’s achievements in some areas has been stellar. The unemployment rate has fallen more than 2 percentage points during her time as Chairwoman and the U.S. labor market has added a significant amount of new jobs. Wage growth has been nothing to talk about, but recently has been on the upswing. At her press conferences, she is articulate and informative on her views of the state of our economy.

As a “Dove.” the President likes her low interest rate policy and lawmakers on the Hill don’t seem to have any problems with how she conducts business.

Yes, no one’s perfect, and she has made some blunders, like tightening policy too soon and not revealing the surrounding controversy earlier this year on the leaks that resulted in the resignation of then Richmond Fed President Jeffery Lacker. But overall, many say she has done a good job and should stay on. She has kept politics out of her decisions and has done a good job of separating the Fed from the rest of Washington.

The question remains, will the President keep her on when her tenure is over in February. We’ll just have to wait and see. I just felt, as I’ve been very
critical of her loose lips policy because of the effects it has on the market place, it was time to give her, her due and report on her accomplishments.

Let us take time out today to remember those lost on 9-11. To those first responders who thought nothing of giving their own lives to rescue others will never be forgotten. And to my Brave Firefighter buddies I grew up with. There isn’t a day that I don’t think about the great times we had together. We are all proud of you what you did that day and hope your families take solace in knowing what true heroes you really are.

Have a wonderful Monday.

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.