Gold’s Rally Slowed by Treasury Yields

The Market Gage - Gold Silver Market Insights

We enjoyed a nice rally in the price of Gold last week, but holding up the rally from continuing further this morning are higher Ten-Year Treasury Yields and a significantly higher equity market due to a cooling off of trade war tensions with China.

However, not everyone is convinced that a trade war will not occur, as illustrated by the CBOE VIX Volatility index being up 6.56 percent today.

But make no mistake about it, the Price of Gold is in rally mode and I expect the U.S> Dollar to continue its decline against other world currencies which will further fuel the rally in the price of Gold.

As I said in past Editions of The Market Gage, metal investors need to be patient as our turn for higher prices is a short distance away. Many of my friends who are financial advisors have adopted my advice to start buying for their clients on a cost averaging basis on any dips in the price of Gold.

Today at 12:30 pm EST: New York Federal Reserve President William Dudley is scheduled
to speak on regulatory reform and Fed Vice Chair Randal Quarles is due to speak on consumer protection. Every time a Fed member shares their views the Gold market holds its breath.

Defining The Markets

Let’s have some fun. Here are explanations of current market terms:

  • Consolidation = no movement in the price and no interest in trading the product.
  • Rhetoric = figures of speech or a way with words that don t amount to a hill of beans.
  • Forecast = something that we expect to happen but we have absolutely no data to back it up.
  • Assumptions = a thing that is accepted as true or as certain to happen, without any proof what so ever.

These are some of the words used by many in the market place and by our government leaders. It’s a sad state of affairs when we can’t be honest and tell the truth. Why don’t we use such phrases and say, “I really don’t know what will happen. I really don’t know what to expect. I just can’t predict the future.”

What happened to a market moving on fundamentals. (Defined as a central or primary rule or principle on which something is based.)

Good start America. Next use accurate data not data that has revisions, get it right the first time. Real earnings, not expectations.

That’s another word I could have added above. Who cares what the analysts expect or predict? And let’s let the actual corporate earnings and the Fed minutes speak for themselves. That’s concrete data and that’s stuff the market can sink its teeth into.

I guess this all came about from a society that has to have answers immediately. Although not always the best course of action, it is something we have gotten used to. Like a security blanket, something to hold on to, but not good for much more than that.

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.