The Market Gage - Dillon Gage's Precious Metals Newsletter

Brexit, Part II: The Referendum on the Referendum…

With the Brexit Vote still reverberating through the global financial markets several days after the historic referendum, precious metals remain a strong safe haven. Today comes word that the UK’s decision might be reversible and it’s likely going to prolong the market fallout which has ensued.

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The Market Gage - Dillon Gage's Precious Metals Newsletter

Britain Cuts Out – Gold Takes Off!

It’s official. In a stunning referendum vote, the U.K. decided to leave the European Union. It’s not what the pundits or poll watchers were expecting as the world woke up to the news on Friday. The effect on the global financial markets was both immediate and impactful. Continue reading →

The Market Gage - Dillon Gage's Precious Metals Newsletter

Two Headlines Could Impact Gold This Week

Two headline stories on tap for this week that could have an impact on the gold price.

Tuesday and Wednesday, the Fed chairwoman, Janet Yellen testifies before congress to deliver her semi-annual testimony. On Tuesday she will testify before the Senate Banking Committee and on Wednesday she speaks in front of the House Financial Services Committee.

Everyone expects Chairwoman Yellen to repeat her message from last week that the Fed wil take a cautious approach to raising rates, as the U.S. economic data is still reported as “weak”.

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The Market Gage - Dillon Gage's Precious Metals Newsletter

No Fed Rate Hike As Brexit Looms

As expected, the Fed left interest rates alone during their scheduled meeting this week.

Citing an unexpectedly weak May jobs report and the looming Brexit referendum vote for England, Fed Chair Janet Yellen stated, “It is a decision that could have consequences for economic and financial conditions in global financial markets. If it does so, it could have consequences in turn for the U.S. economic outlook that would be a factor in deciding on the appropriate path of policy.”

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The Market Gage - Dillon Gage's Precious Metals Newsletter

Precious Metals Modestly Lower This AM

FED Watch.

Precious metal prices are modestly lower this morning as we await the decision from the FOMC meeting today at 2pm Eastern time.

We expect them to provide further guidance on when they expect to raise rates. Still the odds are very low that a rate hike will happen today or in July and a 30 percent chance in September. I expect the odds might change a bit after hearing what they have to say today.

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Minnesota Amends Law Aimed At Coin Dealers

The Minnesota SF 3175: Bullion Product Dealers Regulation Authorization was recently signed by Minnesota Gov. Mark Dayton. This major legislative effort, led by the Industry Council for Tangible Assets (ICTA), reforms the most troublesome law for coin dealers in modern memory.

The state’s “Bullion Coin Dealer Law,” which was passed in 2013, applied to dealers at all levels of the industry and throughout the country, and imposed onerous regulations that were impossible to comply according to ICTA’s Chairman, Harry Miller, “Most coin dealers in the U.S. probably had no idea they were subject to this Minnesota law. But many were affected, even those who thought they had never done business in the state, because of the broad way in which the law was written.”

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England’s Brexit Vote May Cause Gold Rush

Dillon Gage Metals Founder Weighs in on Possible Outcomes

ADDISON, TEXAS (June 14, 2016) – Dillon Gage Metals is investigating what potential effect the upcoming Brexit vote may have on the global precious metals market.

On June 23, British voters will cast ballots to determine whether or not the U.K. will remain in the European Union. According to Dillon Gage Metals Chairman Stephen W. Miller, if the Brexit measure passes, the effects may positively impact long-term value in the precious metals market.

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The Market Gage - Dillon Gage's Precious Metals Newsletter

Overnight Buying From Japan Boosts Gold

Good morning from the IPMI conference in Phoenix, Arizona, where hundreds of traders and dealers from around the world exchange ideas in the Precious Metals markets. You can see the hotel lobby fill up with it all the traders and dealers every hour on the hour for meetings. Companies are here trying to establish new relationships, rekindle old ones and exchange ideas in technology.

Dillon Gage’s cutting edge technology continues to evolve and stands out as the leader in physical electronic trading platforms. Matter of fact, I didn’t see or hear of any other firm offering a comparable trading platform like “FIZ” trade. For any precious metals business, a precious metals platform is a must in order to compete with the worldwide electronic algorithms that move the price of metals in a heartbeat.

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The Market Gage - Dillon Gage's Precious Metals Newsletter

Gold Continues Up on Last Week’s Jobs Report

We’ve witnessed gold up almost 5 percent this week after the disappointing jobs number last Friday.

Hitting the news wires yesterday was a story about billionaire George Soros getting back in the gold market. Soros Fund Management, which manages $30 billion for Mr. Soros and his family, sold equities and bought gold and mining shares. Mr. Soros indicates that he sees a bleak outlook for the global economy, and has directed some of his companies’ investments into the metals arena due to his concerns about political issues in China and Europe.

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The Market Gage - Dillon Gage's Precious Metals Newsletter

World Bank’s Global Growth Forecast Lifts Gold

The World Bank cut its 2016 global growth forecast today to 2.4 percent, down from the 2.9 percent estimated in January. The move is due to sluggish growth in advanced economies, low commodity prices, weak global trade and diminishing capital flows.

Gold, liking that kind of news, is trading up $ 13.00 on the day, at the time of this report. Silver, the so-called “poor man’s gold,” is trading either side of $17.00 this morning (consider just a week ago the worry was, are we going to hold the $16.00 dollar level?).

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The Market Gage - Dillon Gage's Precious Metals Newsletter

Markets Awaiting Fed Chairwoman Talk Today

After the poor jobs number on Friday, the market now awaits comments from Fed Chairwoman Janet Yellen. Ms. Yellen scheduled to speak today at 12:30 eastern time in Philadelphia.

When I first started in this business almost 40 years ago, the news items that seemed to move the gold market the most, were news on inflation and supply and demand concerns. Now for the most part, the market holds its breath on every comment made by any Fed official regarding interest rates, watching the action in the dollar and unemployment / jobs news.

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The Market Gage - Dillon Gage's Precious Metals Newsletter

Silver the Sole Metal With Some Support

The price of gold is trying to consolidate around the $1,220 level as the cloud of higher interest rates hovers above. Redemptions seen in the Gold ETFs overnight and open interest in the CME futures also seen declining in the past few days.

Silver is the only metal getting some support from the retail investor. Platinum traded briefly under the psychological $1,000 level overnight, lowest price since April 19th. Palladium trying to hold a key technical level at $ 530, a level not seen since March 3rd. I expect both these levels to be challenged today.

Some financial advisors report clients have been rotating out of metals and back into equities as the momentum shifts with better returns seen in the short term with dividend paying stocks.

As I indicated in my comment on Monday, with the threat of higher interest rates on the horizon, ( possibly June ) I expect to see a sell bias in the price of gold and unfortunately, I don’t see that changing anytime soon.

Have a wonderful Wednesday.

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 advisors with respect to these areas. By posting this editorial, you acknowledge, understand and accept this disclaimer.

The Market Gage - Dillon Gage's Precious Metals Newsletter

San Fran FED Chair Comments Impact Gold

It is inevitable that the precious metal markets will be influenced right after comments of any FED governor. This morning after a quiet Far East trading session overnight, we hear comments from San Francisco Fed governor Williams, who is calling for 2 to 3 rate hikes in 2016 and 3 to 4 rate hikes in 2017. So, if I can translate that language, that means by the end of 2017 we could see a Fed fund rate of 2 percent?

These comments give the gold market sell signals and chases any nervous long-term investors from holding on to their positions.

This Friday Janet Yellen will be honored at Harvard University with the Radcliffe Medal, presented annually to an individual who has had a transformative impact on society. Right after the ceremony Gregory Minkiw, the Robert M. Beren Professor of economics at Harvard University, will has a sit-down conversation with the FED Chairwomen to discuss her ground-breaking achievements. It is my hope that in that conversation she will bring some stability to these unsubstantiated comments made by her colleagues.

I guess no one at the FED is reading the newspapers or going online to see what’s going in Europe? The Germans and the French are closely watching the possibility of England leaving the EU. Many are screaming, as seen in the French media last week that France and Germany must find a way to strengthen the Euro, otherwise the future of the EU could be in jeopardy.

In my opinion this uncertainty will strengthen the U S dollar and will delay the FED’s ability to raise rates.

In the short term, as more and more comments of a rate hike are shared in the media by Fed governors, gold will have a continued sell bias to deal with.

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 advisors with respect to these areas. By posting this editorial, you acknowledge, understand and accept this disclaimer.

The Market Gage - Dillon Gage's Precious Metals Newsletter

Gold Selloff An Overreaction to FED?

It’s a little after 3 am on the east coast as I start my comment today, because I have to leave early this morning on business and will be driving, so I will be unable to share my thoughts unless I start them now.

Nonetheless, after speaking to a few gold traders yesterday, and listening to the collective opinions of them all, they indicate that the gold market selloff was an overreaction to the comments made by some Fed governors at the Fed meeting in April.

The day before the minutes were released, the odds of a June rate hike were at 4 pct. probability. Yesterday it was around 24 pct. as reported by Bloomberg news.

As I indicated in my comment on Wednesday, with ANY hint of a rate hike, I expect a strong sell off in the yellow metal. And that’s exactly what happened. Perception became reality in a heartbeat. But looking back at that decline in the price of gold and silver, I must agree with the Wall Street traders that this was just a knee jerk reaction and there is no basis at this point to believe that a June rate hike is a sure thing.

Remember the GDP number a few weeks ago from the first quarter reported at 0.5 percent? A weak number at best.

What about all the retailers other than Walmart reporting weak financial results? A report came out earlier in the week that inflation picked up and was reported at 0.4 percent. Does this one number give the Feds the ammunition to raise rates in June?

Remember who running the show at the FED. The FED chairwoman has always said that any rate hike will always be DATA dependent.

So yes, we lost some momentum, but negative rates didn’t go away over in Europe and the Far East, and the migrant crisis in Europe has not improved, so what has changed? NOTHING. A very smart friend and trader, (who I happen to admire) said earlier in the week
that the gold market needs two things for the bull market to sustain itself, a settlement over $1,300 dollars and strong physical demand. Get those two things and we are off to the races.

I finally got the other eye opened. I hope you enjoyed the comment today.

Good night, or shall I say, 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 advisors with respect to these areas. By posting this editorial, you acknowledge, understand and accept this disclaimer.

U.S. Mint Year to Date Sales of Silver and Gold American Eagles

American Eagles Sales as of 5/19/16

The following chart includes the year to date totals from the U.S. Mint as of 5pm on May 19th. Changes below reflect the sales since our last report on May 13th.

Gold
Coin Sales in oz. /#coins + from 5/19/2016
One oz.
315,000
315,000
16,000
16,000
Half oz.
19,500
39,000
000
000
Quarter oz.
17,500
70,000
1,000
4,000
Tenth oz.
41,500
415,000
3,000
30,000
Total
393,500
839,000
20,000
50,000
Silver
Coin Sales in oz. /#coins + from 5/12/2016
One oz.
21,917,500
21,917,500
945,000
945,000
The Market Gage - Dillon Gage's Precious Metals Newsletter

Gold Pressured by FED Comments

Gold feeling pressure after comments from San Francisco Fed President John Williams and Atlanta Fed President Dennis Lockhart. They both indicated that the Fed could raise rates two or three times this year.

The labor department reported inflation picked up in April at 0.4 percent, the largest gain since February 2013.

Higher oil prices fueling the inflation figures giving some at the Fed some ammo to consider a rate hike sooner than later.

Later today, the Fed will release the minutes from the last meeting as the street patiently awaits the news before taking on any positions.

A Stronger dollar ( 7 week high) and slow physical demand is keeping pressure on the price of gold and silver. Any indication from the Fed this afternoon at 2pm that rate hikes are a possibility at the next meeting or two, I expect to see a strong sell off in the yellow metal.

Have a wonderful Wednesday.

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 advisors with respect to these areas. By posting this editorial, you acknowledge, understand and accept this disclaimer.

The Market Gage - Dillon Gage's Precious Metals Newsletter

Middle East Traders Return to Gold

Metals start off the week in positive territory, with the dollar index in negative territory today. Stronger oil prices have some Middle East traders back in the gold market, indicating at these levels that gold looks like an attractive investment to them. My take is that the Middle East gold traders are feeling better now that the price of oil has been climbing at a steady pace. This group has been away from the gold market for quite some time now, and as things improve in the oil market, I expect to see them trading actively again. Action from this part of the globe always puts a charge in the volatility of the gold market.

The ETF gold funds continue to increase day after day and now stand at a 2016 year high of 60,303,873 ounces.

Some Wall Street traders I spoke with this morning have said that they expect gold to test the $1,300 dollar level sometime later this week.

One gold trader I spoke with today said, “I always get concerned when everyone’s on the same page. In my opinion, we need to see gold settle above the $1,300 level for the yellow metal to have any chance of going higher. Physical demand is still lagging in this rally and until I see it pick up, I’ll have a wait and see approach to joining the club, especially at these levels.”

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 advisors with respect to these areas. By posting this editorial, you acknowledge, understand and accept this disclaimer.

The Market Gage - Dillon Gage's Precious Metals Newsletter

Will Britain leave the EU?

Controversy abounds after the comments made yesterday by Bank of England’s Governor Mark Carney. Looking at the coming vote June 23rd, Carney said, “A vote to leave the EU could have material effects on the exchange rate, demand and supply potential.” The consequences “could possibly include a technical recession.”

Wide spread criticism of the governor’s comments have caused a debate among all of Britain’s political groups.

Lord Lamont, chancellor of the UK from 1990 and 1993 and well respected figure said, “The governor should be careful that he doesn’t cause a crisis. If his unwise words become self-fulfilling, the responsibly will be the Governor’s and the Governor’s alone. A prudent Governor would simply have said, we are prepared for all eventualities.”

Why am I writing about this? This referendum; if Britain decides to leave the EU, will have economic consequences for the rest of Europe. Countries in the union would face higher contributions towards the EU budget to compensate for the loss of the second largest economy in Europe. We cannot forget the costs of the migrant crisis and the state of the European economy as a whole. And remember in March the European Central Bank had to add more stimulus.

Another important factor is the negative interest rates for some countries in the EU. I expect negative rates will be around for a while and it is expected that others will be forced to join the club.

No wonder we are seeing the Gold ETF funds increasing almost every day and why gold is up 20 pct. off the lows from last year.

To paint a clearer picture of the years ahead, the possibility of Europe going into economic turmoil could become a reality. And where better to have at least a portion of your portfolio than in physical gold? A good number of Wall Street financial advisors have had clients join the club, but the majority of the equity investors choose the Gold ETF fund. It’s time to explain to investors the advantages of holding physical gold instead of paper as the smarter investment.

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 advisors with respect to these areas. By posting this editorial, you acknowledge, understand and accept this disclaimer.

U.S. Mint Year to Date Sales of Silver and Gold American Eagles

American Eagle Sales as of May 12, 2016

The following chart includes the year to date totals of American Eagles sales from the U.S. Mint as of 5pm on May 12th. Changes below reflect the sales since our last report on May 4th.

Gold
Coin Sales in oz. /#coins + from 5/3/2016
One oz.
299,000
299,000
10,000
10,000
Half oz.
19,500
39,000
000
000
Quarter oz.
16,500
66,000
000
000
Tenth oz.
38,500
385,000
000
000
Total
373,500
789,000
10,000
10,000
Silver
Coin Sales in oz. /#coins + from 5/3/2016
One oz.
20,972,500
20,972,500
1,036,000
1,036,000
The Market Gage - Dillon Gage's Precious Metals Newsletter

Gold Back in Bullish Mode

Gold has a two-day recovery and remains in a “bullish mode” after all the bad news out of China on Monday had been absorbed.

Monday’s open interest in gold revealed that only 6000, as I call them nervous longs, exited the market on Monday’s selloff.

What I find amazing are the almost daily increases in the gold ETFs, now sitting at a new 2016 high of 59,849,362 ounces.

Dollar index is in negative territory at 93.93 at the time of this report, far from the lows of 91.91 when gold was trading over the $1,300 dollar level for a short period of time a couple of days ago.

A story that was shared with me this morning is that JPMorgan Private Bank’s Solita Marcelli said yesterday on CNBC’s “Futures Now” that they are recommending to JPMorgan clients that they position themselves for a “new and very long bull market in gold.”
After seeing three back-to-back years of losses, precious metals have rallied 20 percent in 2016. And that’s just the start according to Marcelli. She indicated “$1,400 is very much in the cards this year.”

As I indicated in previous comments that in a negative interest environment, as we see in some parts of the world, gold remains an attractive investment in the physical market as well as in the ETF arena.

Some commodity funds, as well as some Wall Street day traders, continue their long positions in gold, as they believe the dollar will continue to weaken and the FED will not have the data required to raise rates anytime soon.

Silver, platinum and palladium are also in recovery mode after Monday’s selloff.

Have a wonderful Wednesday.

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 advisors with respect to these areas. By posting this editorial, you acknowledge, understand and accept this disclaimer.

Election 2016: Precious Metals Primer

Dillon Gage Metals Founder Weighs in on Possible Outcomes

ADDISON, TEXAS (May 11, 2016) – Dillon Gage Metals, an international precious metals wholesaler, is investigating what potential effect the 2016 election will have on the markets.

With the respective nominees of Hillary Clinton and Donald Trump all but assured at this point, it’s time to take a look at the impact each administration may have on the precious metals industry.

First, the view of the presumptive landscape under a Trump Administration: The very nature of his campaign thus far could spook international markets, with the Wall Street Journal reporting that “…nervous investors…could pile in to gold and other safe-haven assets as an insurance policy.” And if his trade policy talk rattles the markets further, the fallout of a negative effect on the U.S. dollar would clearly buoy the gold markets globally.

Continue reading →

The Market Gage - Dillon Gage's Precious Metals Newsletter

Precious Metals Under Pressure This A.M.

Markets under pressure this morning after gloom and doom Chinese data overnight. Also hitting the wires is news that Greek lawmakers have agreed to a pension and tax reform plan that will require more stimulus from the Eurozone members.

This news has disappointed the gold market after witnessing open interest up 21,848 contracts on the CME Friday, with hopes that gold would test the $1,300 dollar level. Chinese import data disappoints the base metal markets which in turn also puts platinum and palladium in a downward spiral. All eyes now on the Chinese economy slowing and that’s not good for the precious metals or base metal market.

Some Wall Street traders indicated that the news this morning has all the nervous longs in all four metals selling out of their positions, taking whatever profits that are left on the table and flattening out their positions. I expect tomorrow the numbers will reflect a large redemption in the ETF and CME open interest figures.

Technical levels of support in Platinum and Palladium have been violated so we just have to wait and see how the market reacts after the dust clears. For gold, looking at the charts the next level of support will be the $1,252 level in the June contract and $ 16.68 in the July contract. I‘ll have to wait till tomorrow to see how much damage was done to our so called “bull market.”

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 advisors with respect to these areas. By posting this editorial, you acknowledge, understand and accept this disclaimer.

U.S. Mint Year to Date Sales of Silver and Gold American Eagles

American Eagle Sales as of 5/5/16

The following chart includes the year to date totals from the U.S. Mint as of 5pm on May 4th. Changes below reflect the sales since our last report on April 22nd.

Gold
Coin Sales in oz. /#coins + from 4/21/2016
One oz.
289,000
289,000
25,500
25,500
Half oz.
19,500
39,000
2,000
4,000
Quarter oz.
16,500
66,000
500
2,000
Tenth oz.
38,500
385,000
2,500
25,000
Total
363,500
779,000
30,500
56,500
Silver
Coin Sales in oz. /#coins + from 4/21/2016
One oz.
19,936,500
19,936,500
2,024,000
2,024,000
The Market Gage - Dillon Gage's Precious Metals Newsletter

Gold and News Headlines

Federal Reserve Bank of Atlanta President Dennis Lockhart said yesterday that the U. S. Financial markets may be underestimating the odds of a central bank rate increase in June. Investors currently predict the FED will raise rates only once this year, and see only a 13 percent chance of a hike in June, according to an analysis of Fed fund futures by the CME Exchange. By the way, currently Dennis Lockhart is not a voting member.

Right after the Fed meeting in June comes the vote on whether Britain will leave the European Union in a national referendum. I’m sure the folks at the FED will be watching this closely. Britain is the EU’s second largest economy and no one really knows what the impact will be in the event they turn their backs to the rest of the EU.

This all came about when British Prime Minister David Cameron made an election promise to negotiate a better deal for his country in the EU to unite the left and right in his conservative party. The influx of migrants all over Europe is on all the minds of the British population and will have a direct effect on how that vote goes.

Whether its news over the pond, or in the Far East or here in the states, all the economies are connected. And one must remember that global interest rates and currency valuations have a direct impact on the price of gold.

Case in point. Yesterday the dollar index traded below 92 and hit a low of 91.91 before technical indicators kicked in, indicating the dollar index was oversold. Subsequently, buying came in and propped up the dollar and gold sold off. This morning at the time of this report gold is trading at $1,286.00 and the dollar index has rallied to a high of 93.28 in today’s trading. Nonetheless, even with the price of gold down $3.00 from yesterday’s close, gold continues its bullish tone.

Another bit of news worth sharing is that the holdings in SPDR Gold shares, the world’s largest exchange-traded fund backed by gold, increased by 20.8 metric tons yesterday, the largest one day increase since 2011.

Have a wonderful Wednesday.

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 advisors with respect to these areas. By posting this editorial, you acknowledge, understand and accept this disclaimer.

The Market Gage - Dillon Gage's Precious Metals Newsletter

Strong Inflows To Gold ETFs

We start the week viewing strong inflows into the gold ETF funds. Fueling the rally is a continued weakness in the dollar. Dollar index below the 93 level, a level most Wall Street gold traders were looking for to confirm the bull is alive and well in the gold market.

Silver struggling here a little after a strong rally last week. Profit taking abound in the gray metal, as some believe the price rallied to fast and now needs to take a breather and consolidate at these levels before it can start another upward move.

Open interest in the CME gold contract stands at 549,520 contracts, at levels we have not seen in quite sometime which indicates there are a lot of speculators in the game. Nothing wrong with a lot of participants, it creates volatility which attracts investment.

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 advisors with respect to these areas. By posting this editorial, you acknowledge, understand and accept this disclaimer.

The Market Gage - Dillon Gage's Precious Metals Newsletter

Gold Hits 7-Week High

Gold hits a 7 week high and silver climbs to the highest in 15 months.

GDP growth reported yesterday for the first quarter 2016 was 0.5 percent. This number is a true indication of a slowing economy. How slow you ask? The Commerce Department announced yesterday that the U S economy expanded at the slowest pace in two years. Not to pick on any one president BUT, President Obama will be the only president in history not to deliver a single year of 3.0 percent economic growth. So why do I mention this? Remember the 19 trillion dollar debt we are faced with? Entitlements consuming a good portion of tax revenues. Negative interest rates over the pond ring a bell?

Do anyone of you believe that in a year that we are choosing a new President and experiencing a slowing economy, the Fed will have the data or the nerve to raise rates? And who knows how the presidential contest will end? And will anyone of the contestants be able to control run away government spending?

The GDP number should be an eye opener to the retail investor that it just MIGHT be time to diversify their portfolio into physical precious metals. Some of the financial advisors I spoke to have indicated they have been seeing an increase in physical demand, mostly in silver, for the reason I have indicated in my previous reports.

Remember just a few months ago when gold hit a low of $1,046.00 and then look at where we are today. At the time of my report this morning, gold is up $13.00 from yesterday’s close and $29 dollars higher in the last two days. Silver is up this morning $.25 cents and $ .51 cents higher in the last two days.

More and more participants are entering the markets as we hear a number of commodity hedge funds have recently joined the club.

Looking at other markets this morning, we see at the time of this report, the dollar index down -.44 trading 93.33, adding fuel to the rally in the gold market. Strong inflows into the Gold ETF inventories now at just above 58 million ounces held. ( 1,812.5 tons ) .

A lot of bullish indicators, but like in any market – especially this one – any news that hits the tape can affect the prices in a big way. Remember electric trading platforms and algorithmic programs can move the price in a heartbeat. And let’s not forget, as in any market that experiences a rally like gold and silver has, there WILL be profit taking to contend with.

Let the buyer beware.

What’s in your safe deposit box?

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 advisors with respect to these areas. By posting this editorial, you acknowledge, understand and accept this disclaimer.

Dillon Gage - Flash Market Update

FLASH GAGE – FED Announcement

Fed leaves rates unchanged as expected.
Fed continues its stance that rate hikes will be data dependent.
Fed indicates labor market has improved even with signs of lower growth in the U S economy.
Fed removes reference to global events posing risks to outlook.
Fed repeats economic situation warrants only gradual rate hikes.

Only time will tell.

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 advisors with respect to these areas. By posting this editorial, you acknowledge, understand and accept this disclaimer.

The Market Gage - Dillon Gage's Precious Metals Newsletter

Weak Dollar = Stronger Gold

We start the week viewing the price of gold higher due to a weak dollar. All eyes on the FED later this week as virtually no one expects any news that would affect our markets either way.

Silver sitting just under $ 17 dollars at the time of this report and with a very quiet economic calendar we expect to see some profit taking in the gray metal after the strong rally last week.

So we expect both markets to continue in a tight trading range with a selling bias especially in silver in the next few days.

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 advisors with respect to these areas. By posting this editorial, you acknowledge, understand and accept this disclaimer.

The Market Gage - Dillon Gage's Precious Metals Newsletter

Physical Metals Experiencing Good Physical Demand

Jump in, the water’s fine.

Good physical demand in the Precious Metals arena. Here are some interesting facts from the United States Mint:

  • Silver eagles demand is up 30 percent from the same time last year.
  • Gold eagle demand up 94 percent from the same time last year.
  • Gold buffalos demand is up 19 percent from the same time last year.

Investors have been building up their silver ETF holdings, which have climbed to a year high today of 19,824 tons. The all-time high is 20,073 tons. 19,824 tons = 634,368,000 ounces held.

Some financial advisors report that retail investors are interested in diversifying their portfolios and in turn are buying physical silver. A few financial advisors I spoke with said that investors think that silver is a better investment than gold in the long run, as they say silver has the ability to triple in value as for gold it would take an economic disaster for the yellow metal to do the same.

Did you think I was going to end the article without mentioning “THE FED.” The FED has repeatedly said that it will look at performance across the global economy before making a decision to raise rates. Soft U. S. housing data this week adds to signs of weak first- quarter GDP growth.

The European Central bank left interest rates unchanged yesterday. ECB President Mario Draghi said, “Low interest rates are a symptom of low growth and low inflation. If we want to return to higher interest rates we need to return to higher growth and higher inflation. I recognize that returning higher rates to savers will be difficult.”

So with Europe and the United States struggling to grow their economies how could anyone justify raising interest
rates anytime soon? The next FED s policy meeting is set for April 26-27. Market-based measures of expectations for FED policy have priced out a rate hike for the first half of the year. My take is I don’t see any chance of strong data emerging that will give the FED any ammunition to raise rates ANYTIME this year.

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 advisors with respect to these areas. By posting this editorial, you acknowledge, understand and accept this disclaimer.