Weaker Dollar Continues To Prop Up Gold

The Market Gage - Dillon Gage's Precious Metals Newsletter

Continued weakness in the dollar index, now trading below the 97 level, is propping up the price of gold this morning.

Political uncertainties here in the U.S. are also contributing support to the yellow metal. As you turn on the TV this morning, the dominant talk on the business news channels is unfriendly to the President, as commentators discuss the impeachment process, looking for that a smoking gun.

It seems these days, an investor in precious metals must be aware of the gains and losses in the equity markets, as it appears these two markets have an inverse correlation.

On Wednesday of this week, the markets will be waiting for the FOMC minutes to be released from the last Fed meeting. Currently, the CME Fed Rate watch tool is predicting the odds of a June rate hike at 78.5 percent.

Inflows seen in both Gold and Silver ETFs overnight as some equity investors start to diversify
their portfolios. One Financial Advisor I spoke with this morning indicated that as time goes on and nothing gets accomplished in Washington, he expects more of his clients will ask to put some of their investments into hard assets.

Looking overseas:

Iran:
Over the weekend Iranian President Hassan Rouhani won his re-election by a significant margin. During his election speech, Rouhani indicated that his country is “not ready or willing to be threatened or to be sanctioned.” He also indicated that, “Iran wants to live in peace and friendship with the rest of the world.” Only time will tell during the next four years of his presidency what road he will take in complying or defying his agreement on nuclear enrichment with the US.

North Korea:
North Korea said on Sunday that it launched another successful medium range ballistic missile. This comes a week after they tested a new type of missile capable of carrying a large nuclear warhead. South Korea’s foreign ministry said Sunday the launch was “reckless and irresponsible” while our Secretary of State Rex Tillerson called it “disappointing and disturbing.” As North Korea’s President Kim Jon-un keeps practicing and developing his missile program, the world just sits and watches. Does anyone have any idea what this guy is capable of? He’s like a 16 year old kid sitting in his father’s car with the keys in the ignition just waiting for the opportunity to start driving. “BEWARE”

I share with you the news on both Iran and especially North Korea, because I believe any unexpected
action could affect the price of price of gold in a big way.

I expect if Kim Jong-un continues his testing, some action will be taken on North Korea when President Trump finishes his trip. One might think during the President’s trip he would ask for support to help curb the actions taken by the North Korea before it acts.

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.


Mixed Bag Keeps Gold Stagnant

The Market Gage - Dillon Gage's Precious Metals Newsletter

A mixed bag of indicators to end the week keeping the price of gold virtually unchanged.

A weaker dollar and stronger Ten yield Treasuries sending mixed signals to the market.

Equities seemed to have flattened out, looking for some news for direction.

The CME Fed Watch Tool targeting a rate hike at the next Fed meeting in June at 78.5 percent up from 64.6 percent a day ago.

Platinum Market Overview for 2017

The price of Platinum started the year around the $930 area. Since hitting a high of over $1,030 dollars at the end of February, the price for the most part has been all over the charts. Currently the price of Platinum in the most active CME contract is trading at $ 944.00 .

Platinum ETF holdings in the last ten days have increased by 91,000 ounces. CME Platinum Warehouse stocks currently at 95,000 ounces registered and 130,000 eligible.

This was Platinum week in London where a lot of comments were made by Mining CEOs. The Chief Executive Chris Griffith of the world’s largest platinum miner, Anglo American Platinum, told Reuters on Tuesday, “Policy uncertainty in South Africa and low commodity prices are hurting investment in the mining sector and will lead to further job losses. The miners are awaiting a release of the South African Mining Charter filled with regulations addressing imbalances in South Africa’s past apartheid rule which requires miners to keep black ownership at 26 percent. Uncertainty is dreadful for investment.”

Sixty percent of the industry is losing money and more jobs are at risk. Amplats has cut 15,000 jobs over the last four years and smaller rival Lonmin fired about 15 percent of its staff in 2016. In the end, he expects more mines to close if prices fail to rise.

Currency issues are also facing the miners with the Rand strengthening against the U S Dollar which raises operating costs.

Platinum has many uses. Jewelry, auto catalysts, many industrial applications as well as medical devises. If this administration fails to get a corporate tax cut in place and the economy slows down, all the areas of Platinum consumption will be effected.

Reuters reports Platinum prices were higher last year, but still near eight year lows despite expectations of a sixth year supply deficit. Two questions remain:, If the price of Platinum falls, at what price does it become an issue for the miners? And if the demand continues to exceed the supply, at what price point might the price of Platinum turn around?

Sorry I have no answers on this one, but it will be an interesting market to watch.

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.


American Eagle Sales as of 5/18/2017

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

The following chart includes the year to date totals for 2017 from the U.S. Mint as of 5pm on May 18th. The chart also shows the change in sales from 5/11/2017 which we reported on May 12th.

Gold
Coin Sales in oz. /#coins + from 5/11/2017
One oz.
132,500
132,500
3,000
3,000
Half oz.
13,000
26,000
000
000
Quarter oz.
12,000
48,000
500
2,000
Tenth oz.
23,000
230,000
1,000
10,000
Total
180,500
436,500
4,500
15,000
Silver
Coin Sales in oz. /#coins + from 5/11/2017
One oz.
10,352,500
10,352,500
580,000
580,000

Gold and Silver Boosted By Lower Dollar Index

The Market Gage - Dillon Gage's Precious Metals Newsletter

It has been a few months since we have seen the dollar index below the 98 level. With the Ten-Year Treasury yields now below 2.3 percent, both markets giving Gold and Silver a boost this morning.

As I started this report this morning we have seen equities down triple digits. It seems that as the equity markets head south, more investors are seen taking profits off the table and heading for the bond market and precious metals. Looks like the President’s agenda is on life support, with many looking for a way to pull the plug once and for all.

Some guests on CNBC were saying this morning that as time goes by, the chances of the President doing something that would get him impeached will increase dramatically. They went on to say that Pence and the Republicans will really give the Equity markets a boost. In my opinion, it doesn’t matter whether you support the President or not this kind of rhetoric only divides the country further.

Today I was asked to give a little information on how well the Palladium market has done in 2017, but before I talk about the price movement let’s talk about the primary uses for physical palladium.

The largest use of palladium is in catalytic convertors for automobiles.
Palladium is also used in dentistry, watch making, electrical contacts and
surgical instruments. It can also be found in laptop computers and mobile phones.

Palladium is rarer than gold or platinum and is one of the six elements in the so-called Platinum Group Metals (PGM’s). The other products are Platinum, Rhodium, Ruthenium, Osmium and Iridium.

At the beginning of 2017, we saw palladium trading around the $705 area. So far this year, investors have realized a gain in the price on the highs, most recently of approximately 15 percent. Who says the Equities are the only market giving double digit returns?

This year Palladium hit an intraday high of $830.35. The last time we seen these levels for Palladium was back in September of 2014. Open interest on NYMEX has been increasing and institutional investor interest increased in the month of April.

According to the charts, the level of resistance for the long term investors is at the $ 819- 820 level in spot. That area has been challenged this year a few times this year with no follow thru on any London fixing price. Currently the spot price of Palladium is trading at $786.00.

Palladium ETF movement has been flat of late, sitting at 1,526.000 ounces, and the CME group is reporting approximately 12 thousand ounces registered and 30 thousand ounces eligible in approved depositories.

I believe any increases in the price of palladium will be attributed to how the economy fares in the future. It’s no wonder the palladium market has done so well this year with all the promises of this administration for stronger growth. In the end, if the economy continues to grow as some members of the Federal Reserve predict, the price of palladium could
be the diamond in the ruff for investors.

But the question remains, is this country headed in the right direction?

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.


Dillon Gage Metals Offers Exclusive One-Ounce Silver Round

Uncle Sam silver rouind
Celebrates 100th Anniversary of Famous “I Want YOU” Poster

ADDISON, Texas (May 17, 2017) – Dillon Gage Metals, an international precious metals wholesaler, is set to release an exclusive and original one-ounce silver bullion medallion celebrating the 100th anniversary of Uncle Sam’s famous recruitment poster heralding, “I Want You for U.S. Army.” This iconic image is being portrayed for the first time in .999 fine silver and is being produced in the United States. Shipping of the rounds will be on a first come, first serve basis, expected to begin the week of May 22.

Continue reading “Dillon Gage Metals Offers Exclusive One-Ounce Silver Round” »


Weaker Dollar Continues To Boost Gold

The Market Gage - Dillon Gage's Precious Metals Newsletter

A continued weaker dollar is giving gold a boost this morning. Overnight, good physical silver buying has emerged in the Far East as tensions with North Korea continue to be on the minds of most in that region.

Chinese President Xi has indicated that he will spend 78 billion for infrastructure projects, helping prop up the value of metals across the board.

Strong inflows continue in the Platinum ETF as investors and commodity funds seem to have a new found interest in the PGM arena.

Turning to the EU – now that the French Presidential Election is over and most European investors are feeling better about their currency as we saw last week with a $6bn flow into European stock funds. Earnings growth in Europe have been better than here in the States so some traders have seen a rotation out of metals and into equities since the French Election. One gold dealer said, “My sales have dried up since the French Election and the only action I have is some folks coming thru the door selling some products they bought a short time ago.”

Also a shining light in the Eurozone has been the report of manufacturing hitting a 6-year high in April. The biggest participants have been France, Germany and Italy. Greece still seems to be struggling as they reported falling output for the eighth month in a row. So it looks like idle money will flow where the action is and it seems this is just what the EU community needed after all the gloom and doom it has experienced since the migrant crisis.

On our shores – U.S. Stock Funds saw their second week of outflows, redeeming almost $2.4 billion dollars, and have been exiting these products since March at a combined total of over $20 billion dollars. The question I have, is this the start of a rotation out of U.S. Equities and into hard assets? It’s too early to tell if this pattern will continue, but don’t you think the smart money sees what’s going on in Washington and is starting to protect their gains since the election?

Friday’s data on U.S. inflation and retail sales in April came in weaker than expected, softening the dollar. Buying emerged in the 10-Year treasuries giving gold and silver a boost.

After the disappointing economic data was released on Friday, the odds of a rate hike in June according
to the FOMC Fed Watch rate tool dropped from 83 percent to 72 percent.

A few months ago I thought that if there was going to be a rally in the precious metals markets it would be started from across the pond. Now it looks like the any rally will be initiated from actions here in Washington and possibly the Far East.

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.


American Eagle Sales as of 5/11/17

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

The following chart includes the year to date totals for 2017 from the U.S. Mint as of 5pm on May 11th. The chart also shows the change in sales from 5/4/2017 which we reported on May 5th.

Gold
Coin Sales in oz. /#coins + from 5/4/2017
One oz.
129,500
129,500
500
500
Half oz.
13,000
26,000
500
500
Quarter oz.
11,500
46,000
000
000
Tenth oz.
22,000
220,000
1,000
10,000
Total
176,000
421,500
2,000
11,500
Silver
Coin Sales in oz. /#coins + from 5/4/2017
One oz.
9,772,500
9,772,500
450,000
450,000

Gold and Silver Volumes Increase Over April 2016

The Market Gage - Dillon Gage's Precious Metals Newsletter

Gold and Silver CME futures volumes pick up over 30 percent in April compared to April last year, but most see this price action headed in the wrong direction.

Outflows seen overnight in the Gold and Silver ETF as some short term players head for the exit.

A mixed bag of indicators this morning as we see a stronger dollar and softer Ten Year Treasury Yields.

Gold’s 100-day moving average was violated yesterday but since has recovered which gives some nervous longs a little courage to hold on to their positions.

Now for a look at the politics that can affect the economy AND precious metals:

Washington continues to be one big special interest group and it doesn’t matter who’s in the White House, it’s the same old politics.

Let’s look at the proposed Trump tax plan. As Treasury Secretary Steve Mnuchin calls it, “The biggest tax cut and the largest tax reform in the history of our country.” (Just remember his job history and you’ll understand why he’s behind this plan.)

How will this affect individuals:

  • Reduce the number of tax brackets from seven to three and cut the top marginal rate from 39.6 to 35 percent.
  • Double the standard deduction, but eliminating state and city taxes from your federal return (Yes, your property taxes are on the deductible chopping block) However, Mortgage interest and charitable contributions are still deductible.
  • Repeal the Alternative Minimum Tax, the Estate Tax and the Obamacare tax on investment income.

Starting to see a picture developing? Good I’ll go on…

How will this affect businesses :

  • Reduce the corporate tax rate from 35 percent to 15 percent and a onetime tax on a trillion of dollars overseas.
  • Allow small businesses to have their profits taxed at 15 percent.
  • An income earned tax which is “territorial in nature” as businesses would only be taxed on income earned in the U.S. In other words, if you manufacture a product here and sell it overseas the you pay no tax on the earned income.

Just think how big corporations must be cheering these proposals, along with the corporate tax reduction.

Are you seeing a really clear picture. Are you concerned?

One more piece regarding healthcare. The so-called repeal and replace plan has one part that I think is a real injustice; instead of giving a stipend to low income folks helping to offset some of the cost of their healthcare they took that away and are now giving them a tax break to help to cover for the loss of the stipend. Does anyone know how many folks that are in the low income category pay any taxes at all? So really folks, how does that help them?

By now you must be saying to yourself, are they for real? Yes they are…

So sit down for the next statement. The tax policy center concluded that the Trump plan would cut taxes by 6 trillion dollars over 10 years WITH ALMOST 50 (YES, 50 PERCENT) of savings going to the TOP 1 percent.

Figure this: Corporate taxes only make up 10 percent of the federal intake of revenues. According to the Center for a Responsible Federal Budget this plan would reduce the income the U S treasury would receive in the next ten years by more than 2 trillion dollars.

REMEMBER the country’s debt is almost 20 trillion dollars and then there’s our entitlement programs. How in the world will we be able to reduce the debt and fund the likes of a promised Social Security and Medicare?

Are they really draining the swamp or just feeding the “alligators”?

Oh yea, by the way, did you remember where Treasury Secretary Steve Mnuchin once worked? I rest my case.

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.


French Election Fails to Impact the Price of Gold

The Market Gage - Dillon Gage's Precious Metals Newsletter

The market finds support after last week’s selloff. Neither Le Pens loss in the French Election nor the stronger dollar and higher Ten Year Treasury yields seem to have had a negative impact in the price of gold this morning.

A disappointing loss for the European gold bugs that were rooting for Le Pen to win, as her promise to see France exit the EU was something they were hoping for.

But the European gold bugs have not given up hope just yet. All you have to do is remember the continued bad debt crisis effecting Italy.
Continue reading “French Election Fails to Impact the Price of Gold” »


Gold in Recovery Mode This Morning

The Market Gage - Dillon Gage's Precious Metals Newsletter

The price of Gold in recovery mode this morning despite a stronger dollar and higher treasury yields.

Some Wall Street Gold traders on Wednesday put on short positions as the price of gold broke thru the 200 day moving average at $1,250.80. As I indicated in the past, their strategy is to make a profit of fifteen to twenty dollars and get out. And that’s exactly what they did as soon as we broke thru the strong support level of at $1,232.00.

Now onto economic and political headlines from Europe.

Continue reading “Gold in Recovery Mode This Morning” »


American Eagle Sales as of 5/4/17

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

The following chart includes the year to date totals for 2017 from the U.S. Mint as of 5pm on May 4th. The chart also shows the change in sales from 4/27/2017 which we reported on April 28th.

Gold
Coin Sales in oz. /#coins + from 4/27/2017
One oz.
129,000
129,000
2,000
2,000
Half oz.
12,500
25,000
000
000
Quarter oz.
11,500
46,000
000
000
Tenth oz.
21,000
210,000
000
000
Total
174,000
410,000
2,000
2,000
Silver
Coin Sales in oz. /#coins + from 4/27/2017
One oz.
9,322,500
9,322,500
530,000
530,000

FLASH GAGE – No Change in Fed Policy

No change in Fed policy at today’s May meeting. the FOMC Watch Tool gives a chance of a 25 basis point rate hike at 67.4 percent at the next meeting in June.

I’ll take the other side of that bet as the Democrats and some Republicans keep a hard line position against anything President Trump puts on the table.

Even if they take a vote tomorrow and the Health care bill passes, that’s just one house, there is another that needs to join the Health care ranks. And no one knows how long it will take before a tax bill can even be submitted to both houses.

The media is acting like a bunch of teenage cheerleaders trying to keep the narrative alive that the Equity markets have a lot more upside potential when President Trump’s agenda gets done.

Not so fast everyone, this is Washington politics and everything takes forever.

Enjoy the rest of your day.

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.


Fed Wraps Its May Meeting Today As Gold Remains Listless

The Market Gage - Dillon Gage's Precious Metals Newsletter

The Fed concludes its May meeting today with the Street only looking at a 4.8 percent chance of a rate hike.

After the poor first quarter GDP number, I assume there really isn’t much to talk about, so they might as well take out the lunch menu and order out.

No press conference today from the chairwoman, so we just have to wait to see what the six paragraph
statement contains.

Gold knocking on the door of the 200-day spot moving average at $1,250.80 level and I suspect if that figure is taken out, some stops will be executed. Levels of spot below are soft at $1,248 and not
until $1,232 do we get to see a good level of support.
Continue reading “Fed Wraps Its May Meeting Today As Gold Remains Listless” »


Quiet Start For Gold Despite Weaker Dollar

The Market Gage - Dillon Gage's Precious Metals Newsletter

Quiet start to the week as we see the dollar in negative territory and Ten-Year treasury yields slightly higher.

As the price of gold continues to be in hibernation mode, some dealers have indicated that they are tightening up their credit lines to clients. Some dealers have indicated if the market stays like this for a while consolidation of some firms and dealers heading for the exits could accelerate.

As expected, Wall Street gold traders are looking to other markets for action with some exclusively trading oil and currencies until some life comes back into the precious metals arena.

Now on to the political arena and a character that seems to be forgotten. Can you guess who this is?

Hello Washington remember me? With all that’s going on in the world it seems I’m being totally ignored for some reason.

Obviously no one in Washington really cares about me. Everyone is so concerned with repealing Obama care and giving everyone a tax break. Even the equity markets give me no respect.

And now you might have some bigger issues to contend with, like the potential North Korea conflict or the continued Russian involvement in world politics. But you will be doing your country a very
big injustice if you continue to ignore me.

Because I can become a condition that you will have no cure for until it’s too late.

I am your country’s debt!

My last physical in March revealed that I am gaining weight (approaching 20 trillion) and I have no chance of losing weight any time soon.

At the close of my health exam at the end of last year I had:

  • $8.5 trillion ($8,542,000,000,000) in liabilities that are not accounted for in the publicly held national debt, such as federal employee retirement benefits, accounts payable, and environmental/disposal liabilities.*
  • $29.0 trillion ($29,038,000,000,000) in obligations for current Social Security participants above and beyond projected revenues from their payroll and benefit taxes, certain transfers from the general fund of the U.S. Treasury, and assets of the Social Security trust fund.*
  • $32.9 trillion ($32,900,000,000,000) in obligations for current Medicare participants above and beyond projected revenues from their payroll taxes, benefit taxes, premium payments, and assets of the Medicare trust fund.*

Combining the figures above with the national debt and subtracting the value of federal assets, the federal government had about $84.3 trillion ($84,306,000,000,000) in debts, liabilities, and unfunded obligations at the close of its 2016 fiscal year.*

The obligations for Social Security and Medicare represent how much money must be immediately placed in interest-bearing investments to cover the projected shortfalls between dedicated revenues and expenditures for all current participants in these programs (both taxpayers and beneficiaries).*

After reading this you can see how contagious I can really be. So much so, that I can eventually infect every single American and their children for years to come. Washington please find a cure for me before it’s too late.

Have a wonderful Monday.

*Figures are reported by Just Facts.

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.


Gold Fails To React To 1st Quarter GDP

The Market Gage - Dillon Gage's Precious Metals Newsletter

The price of Gold shows no reaction to the 1st quarter GDP number released this morning. Real gross domestic product only increased at an annual rate of 0.7 percent, compared to the fourth quarter 2016 which showed an increase of 2.1 percent.

A weak economy reduces the chance the Fed will have the ammunition to raise rates at the June meeting as expected by some on the street. And with that bullish news the price of gold just sits in hibernation mode.

What is going on in Washington? On Fox business today, Texas Representative Lou Gohmert said he believes there are people in the Republican Party that want to see President Trump fail. Case in point, the Republicans had hoped they would be able to vote and pass a health care bill today and after Ryan spoke with his party members he realized that a vote today would be a waste of time. So the health care bill, something that the president promised he would get done as soon as he got into office, is back on the shelf.

Now if you think he got nowhere with that promise, what about the promise to the American people he will significantly reduce the corporate tax rate and give a real tax break to middle class America? Anyone want to guess the odds of getting this done? Yes, recent corporate earnings on Wall Street have been promising but don’t you think the real reason for the rally on Wall street has been his promise to give everyone, especially the big corporate giants, a significant tax break? I wonder how long it will take for the equity market to wake up and see there is total gridlock in Washington and tax relief is miles away. At that point one could expect a nice rally in the price of gold as everyone in the equity market will be heading to the exits.

Now to Trump’s proposed tax plan. If you work for a Wall Street firm or run a small business you might be cheering, otherwise here is what some tax scholars are saying the majority of us will see.

They estimate that the top 1 percent of households would see a 14 percent increase in after tax income, while low and middle-class Americans will see gains of just 1.2 percent to 1.8 percent. Doesn’t sound like the enormous tax benefit he promised. First let me be clear, I’m only sharing what I read, I don’t belong to any political party.

Here’s the details:

As reported in USA Today, the standard deduction, currently $6,350 for single people and $12,700 for married couples, would double. As a result, many more low to moderate income families would pay no taxes. But all other deductions, except for mortgage interest and charitable contributions, would be eliminated, including state and local taxes and medical expenses and the property tax deduction is also on the chopping block.

Removing the state and local deductions would have the biggest impact on middle class America.

Another so-called thorn in the side for most wealthy Americans, is the Alternative Minimum Tax. This tax would be eliminated. Unless your income is in the highest so-called bracket, this elimination would not benefit you.

There is so much more on the table including less tax brackets to simplify the system. So please familiarize yourself on what is being proposed.

The idea was to simplify the tax plan, but at this point the jury is still out on whether that will be accomplished.

I share this information with you because the new rules will have a direct impact on the Dollar and Equity markets. As an informed investor, understanding what’s ahead is essential to making intelligent investment decisions.

Just some news from over the pond that effects the price of gold:

On Thursday the European Central Bank left its benchmark rate at zero and the deposit rate at minus 0.4 percent. They will continue to buy 60 billion Euros in mostly government bonds under their quantitative easing platform that should run to years end.

I’m sure this decision was made as the key political risk of France leaving the EU for the most part is now off the table.

ECB President Mario Draghi said yesterday, “Growth is improving. Things are getting better.” He sees record low interest rates and the ECB’s asset purchasing programs as the main reason for continued growth.

Some ECB officials are not sharing Draghi’s optimism until the French election is decided. Sounds just like our Federal Reserve panel here in the states.

I’ve said enough today, but I can’t leave you without saying,

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.


American Eagle Sales as of 4/27/17

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

The following chart includes the year to date totals for 2017 from the U.S. Mint as of 5pm on April 27th. The chart also shows the change in sales from 4/20/2017 which we reported on April 21st.

Gold
Coin Sales in oz. /#coins + from 4/20/2017
One oz.
127,000
127,000
1,000
1,000
Half oz.
12,500
25,000
000
000
Quarter oz.
11,500
46,000
000
000
Tenth oz.
21,000
210,000
1,000
10,000
Total
172,000
408,000
2,000
11,000
Silver
Coin Sales in oz. /#coins + from 4/20/2017
One oz.
8,792,500
8,792,500
235,000
235,000

Gold Under Pressure From Higher Dollar

The Market Gage - Dillon Gage's Precious Metals Newsletter

Let’s start with the domestic morning headlines that are impacting precious metals:

  • A stronger U.S. dollar and higher treasury yields are keeping the pressure on the price of gold this morning.
  • Outflows continue in both the Gold and Silver ETF funds as investors look to cash in their chips for a chance at the equity table.
  • The entire U.S. Senate heading to the White House today for a North Korea briefing. I would love to be a fly on that wall.

Now to the News around the globe that has a direct effect on our market.

What does Ms. Marine Le Pen have to do to win the run off with Mr. Macron for the French Presidency?

It seems that not only the markets are thrilled with Mr. Macron’s victory in the first round of the election, the European Union Community experienced a welcome sigh of relief.

Even though the polls give Mr. Macron 62 percent and Le Pen 39 percent with under two weeks to go, don’t count her out just yet. Most political French commentators say it’s not possible for her to win unless something radical happens. First and foremost, she needs to change her policy on exiting the Euro to give herself any chance. Something European gold investors would not be happy with.

We all agree she is a highly controversial individual because of her anti-immigration policies and her close ties to Russia. What most believe hurt her, was her trip in March to visit with Russia’s President Putin. It was reported she was there also to try to secure financing from Russian banks to help with her campaign.

Time Magazine has reported that in 2014, Le Pen’s Party, The National Front, took out a nine million Euro loan from a Moscow bank, so it seems that there is a strong relationship with Russian government.

Since this is a known fact about Ms. Le Pen, I agree something radical must change in the next 11 days to give her any chance, otherwise she will go the way of the 2016 Democratic Vice President candidate (I bet most don’t even remember his first name) Tim…Kaine, probably never to be politically heard from again.

The Gold market had heightened interest in this election as most believed a Le Pen victory would be the end of the EU, as France would be the next to exit and ultimately cause a breakup of the European Community. But at this point the odds are in favor of the EU staying just as it is today.

I find it interesting that since President Trump met with China’s President Xi, North Korea hasn’t
attempted their sixth Nuclear test. I don’t want to anticipate America’s response to that test as Kim Jung-un must be fully aware that the U.S. might respond militarily if he tries something.

I mention both the French election and the problem with North Korea, as these two news items are seemingly the only catalysts for a higher gold price at this time. Just look at all the attention the stock market has received since the corporate tax cuts are all the talk on Wall Street. Avoiding a government shut down is also at the top of the list. So at this time, without any significant news, the price of gold seems to be headed into market hibernation for the time being.

If you remember a week ago we reported that the Wall Street Gold Traders took their profits when the market traded back to the $1,278-$1,279 level and got out. Since then the only place you might find them is at a high end steak house on the east side of Manhattan enjoying their lunch.

If the gold market breaks thru the 200-day moving average at $1,253, I expect they will be back in the market playing it from the short side.

Patience everyone, there are better days ahead.

Finally, here is a public service announcement: Don’t get too excited about the proposed corporate tax cuts when the politicians are behind closed doors trying to take away or reduce your 401(k) tax benefit. THAT’S RIGHT, as Wall Street is cheering President Trump’s corporate tax cut guess who winds up paying for part of that tax windfall; YOU DO!

Congress is reportedly looking at how it treats all 401k contributions. Right now, any income and gains your 401(k) generates don’t get taxed until you make withdrawals. But one proposal would impose a 15% tax on annual gains within 401(k) plans. If you participate in a 401k you need to call your representative and tell him or her don’t you dare tax upfront our 401k plan!

Just giving you a heads up, and remember always read the small print first.

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.


French Election Results Ding Gold

The Market Gage - Dillon Gage's Precious Metals Newsletter

Le Pen’s second place finish hurts the price of gold.

As soon as it was obvious that Le Pen was not going to win the first round of the French Presidential election, the price of gold took it on the chin. In the early evening here in the states, the CME Gold futures contract traded down $23.00 to an intraday low of $1,266.00.

Le Pen finished in second place behind a former investment banker and political novice Mr. Macron. This is a very untraditional outcome, as neither candidate came from the establishment parties that have been in power for decades.

Nonetheless, a second place finish gets her into a runoff in two weeks to see who will be the next President of France. According to the polls and the way the equity markets are reading the tea leaves this morning they are not giving her much of a chance of defeating Mr. Macron.

So now it looks like the European Community will stay together and just have to deal with the UK leaving. We will have to wait to see what the financial impact will be as the process develops.

This election was so much a part of the recent rally in the price of gold that even with the lower dollar this morning, gold seems to be in an offer mode down $17 dollars at the time of this report. I do expect the price to recover somewhat but for now the rally has lost all its momentum.

Back to our shores, U.S. news events that can impact the markets this week:

Will both parties come to an agreement later this week to fund the Government, or will the Democrats play hardball with the president? Healthcare seems to have zero impact on any market and everyone’s awaiting the big announcement on Wednesday promised by the President with his plan for tax cuts both corporate and individual. Equities around the globe are up nicely this morning and the Dow is up over 200 points on the opening. So one could expect the equities to get all the coverage this week unless some unexpected news hits the wires.

The next level of support in the gold is at $1,248.00 and silver at $17.52.

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.


All Eyes Are On This Weekend’s French Election

The Market Gage - Dillon Gage's Precious Metals Newsletter

If you read our comment on Wednesday, I indicated that we would have to hold the level of support in gold at the $1,278-$1,279 level in the June gold contract otherwise I believed that the anticipated Wall Street Gold traders stop loss levels would be triggered.

And if you watched the action Wednesday in the June Gold Futures contract, that is what seemed to have happened. So much so that at that point the selling accelerated the price of gold to a new inter-day low in the June contract of $1,275.40. It seems as soon as the anticipated stops were filled, the market rebounded back to the $1,282 area.

Today, it seems everyone is happy making a couple of dollars and now the traders I speak with will wait for the next opportunity to surface.

To news over the pond:

The International Monetary Fund is warning that when Brexit is finalized, it could have an unpredictable outcome, posing a risk to global financial stability. Wednesday, on an lopsided vote by British law makers, they agreed to hold snap elections on June 8th. This should give the UK’s Prime Minister Theresa May parliamentary support and gain more leverage to negotiate Britain’s withdrawal from the European community. The Prime Minister said, ”A general election is the best way to strengthen Britain’s hand in the negotiations ahead.”

Watch out world, as the Washington Post reported on Wednesday, the French Communist party candidate Jean-luc Melenchon is gaining in the polls in the French election to be held this Sunday. What is so interesting is the fact that Mr. Melenchon, like his opponent Ms. Le Pen, is also in favor of France reclaiming her independence from the EU. Right now, he is in third place and very close in the polls to the gentleman in second place Mr. Emmanuel Macron.

The question that is on everyone’s mind around the globe is, if both Ms. Le Pen and Mr. Melenchon come in one-two in Sunday’s French election, how will the financial markets and the commodity markets react come Monday morning? A trader I spoke with this morning said if they come in one–two he expects a selloff in the euro Sunday night and a rally in the dollar moving gold lower.

As expected, no one candidate will win a majority so the two front runners will compete in a run-off election in May. Living here in the States, you might not think that this is big news, but globally this is a “very big deal.”

Any more terrorist attacks like the one yesterday should help the front runner Ms. Le Pen gain more votes. Yesterday she indicated that if elected she will expel every suspected terrorist in France immediately.

As reported in the Washington Post, some are in a panic state. Investors have begun frantically selling off French bonds, while the head of France’s largest trade union has decried what he described as Melenchon’s “rather totalitarian vision.” But thousands of others have responded with joy.

According to the Washington Post nearly 25,000 people assembled in a predominantly middle class northern French city this past Wednesday evening to hear Melenchon. With his distinct wit, erudition and rhetorical flair, he charmed his crowd, that was packed inside and outside a local sports arena, waving communist banners, Palestinian flags and signs adorned with the Greek letter phi, the campaign’s official symbol.

It seems as if every weekend of late has a big event on tap. Just last weekend all eyes were on North Korea’s holiday, “The Day of the Sun,” where their leader Kim Jung-un threatened the world with another Nuclear test. Luckily that didn’t happen.

This weekend the world might not be as nervous as it was last weekend, but you can be sure all investors around the globe will be watching this election closely.

One must believe that eventually any one of these stories coming to fruition can give the price of gold a huge boost.

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.


American Eagle Sales as of 4/20/2017

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

The following chart includes the year to date totals for 2017 from the U.S. Mint as of 5pm on April 20th. The chart also shows the change in sales from 4/6/2017 which we reported on April 7th.

Gold
Coin Sales in oz. /#coins + from 4/6/2017
One oz.
126,000
126,000
1,000
1,000
Half oz.
12,500
25,000
000
000
Quarter oz.
11,500
46,000
000
000
Tenth oz.
20,000
200,000
500
5,000
Total
170,000
397,000
1,500
6,000
Silver
Coin Sales in oz. /#coins + from 4/6/2017
One oz.
8,557,500
8,557,500
345,000
345,000

Weaker Dollar Buoys Gold As We Eye France’s Election

The Market Gage - Dillon Gage's Precious Metals Newsletter

A weaker dollar index of late under 100 keeping the price gold a float.

The Ten-Year Treasury yield at 2.20 percent in positive territory this morning, up overnight from a low yield of 2.1943 keeping some pressure on the gold price this morning.

I’m told large fund selling in the far east overnight also putting pressure on the price of gold. This move has kept the Wall Street Gold traders guarding their long positions. Both my technical friends and the Wall Street Gold traders I spoke with this morning are calling the $1,278-$1,279 level in the June contract a level of support. I expect this is where the smart traders are entering their stop orders after going long at the $ 1260 area a week ago.

For the readers who follow the FOMC Fed Rate Watch Tool here is an update. The next Fed meeting in May is only showing a 4.3 percent chance of a 25 basis rate hike . June is showing a 42.3 percent chance and at no point at the remaining meetings does the odds exceed 45.8 percent. Only a Chrystal ball prediction, if there is no data to support another increase.

Now to news from across the pond:

We will be following the French election closely this weekend as the outcome can have a significant
impact on the price of gold in the coming months.

We all know Ms. Len Pen’s stance of taking France out of the EU. She has stated that within six months into her term she will put together a referendum for France’s exit from the European Community, and if it fails, she indicated she will step down.

Two suspects were arrested on Tuesday on suspicion of planning an imminent and violent terrorist attack ahead of the first round of France’s election this weekend. Not surprisingly, Ms. Le Pen has increased her anti-immigration and Anti-Islamic rhetoric, trying to excite her constituents before the election.

The arrest will benefit Ms. Len Pen’s campaign. Over the weekend she continued with her promise to give the French their country back by suspending all legal immigration and protect their way of life. She stated “Give us France back, damn it” as her supporters yelled in a loud voice “This is our home.” Ms. Le Pen also said, “this election is about losing the way of life the French people have enjoyed for centuries…In France, we drink wine whenever we want. In France we do not force women to wear the veil because they are impure. In France, we get to decide who deserves to become French”.

No one expects any one of the five candidates to win a majority, so a runoff election is scheduled next month.

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.


Gold Holding Steady as a Safe Haven

The Market Gage - Dillon Gage's Precious Metals Newsletter

Let’s start this Monday morning with some headlines:

Money is pouring into the U.S. Ten Year Treasuries as the yield just a couple of weeks ago was at 2.60 percent, today the ten year is yielding 2.23 percent.

Gold virtually unchanged this morning as it too recently has been a home of the safe haven investments like the U.S. treasuries.

The dollar index approaching the 100 level once again as the President continues to promote his idea that a weaker dollar is good for our economy. It is also happens to be good for the price of gold.

Gold ETFs up for the fourth day in a row, adding a healthy 356,000 ounces into the funds.

As I indicated before, I expect gold to move at a steady pace higher as all the world financial headlines and political uncertainties give the price a boost.

If you have been following my most recent comments, you’ll see that the Wall Street Gold traders are on the same page, continuing to hold on to their long positions with adjusting their trailing stops, as the market trends higher to protect their earned profits.

Now news over the pond, The volatility in the euro increased to the highest levels since before the Brexit vote as our “Golden Lady,” Ms. Len Pen, increases the pressure on her rivals just before the French election. The polls indicate a very tight race without any one candidate getting a majority. The most recent figures show Ms. Len Pen and Mr. Macron at 23 percent followed by Mr. Fillon and Mr. Melenchon with 20 and 19 percent respectively. At this point the chance a of a run off in May is almost a sure thing.

Ms. Le Pen continues her stance that France is better off out of the Euro Zone. So if she wins, a referendum on whether to exit the EU is expected in just six months after she is sworn in. Obviously if this happens, the price of gold will be a big benefactor of the exit of France from the EU.

Now to the news the whole world is watching.

Everyone was expecting something significant to happen as the North Koreans celebrated the most important holiday of their year, called the “Day of the Sun.” Thankfully nothing of consequence happened Saturday in North Korea except a failed missile launch.

One must keep a close eye on North Korea as it continues to be like a boiling pot of water. Since Kim Jong-un
didn’t test his sixth nuclear test on Saturday, let’s have some fun and call him the “Potato” and President Trump the “Egg.” No I’m not going crazy. Just think when you have a boiling pot of water in front of you and you drop a potato and an egg in the pot at the same time. What happens after a couple of minutes? That’s correct, the potato softens and the egg gets hard. That’s exactly what happened this weekend. Kim Jung-un softened up a bit. Maybe the advice of the Chinese or the “hard” stance taken by the U. S. gave him second thoughts. Nonetheless, I’m sure this confrontation is far from over.

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.


FLASH GAGE – How Will U.S.’s Big Bomb Drop Affect Gold

The U.S. just dropped the mother of all bombs on an ISIS tunnel in Afghanistan. This is the largest non-nuclear bomb the U.S. has in its arsenal.

The Trump administration at the same time issues a picture of our military capabilities of our aircraft carriers ready to strike North Korea if they send up a missile or even worse test their nuclear capabilities for the sixth time possibly on Saturday commemorating their founders birthday.

The gold market has no reaction to the story as we see the dollar stronger and the ten year treasury softer keeping gold in its place. But equities are selling off the news. But as the equity markets sell off I expect gold to catch another bid.

This weekend we all should be watching closely and I mean closely all the news out of North Korea as they celebrate their holiday on Saturday. There is no telling what Kim Jung-un is capable of but one thing is for sure based on what we seen from President Trump so far if he acts we are coming and gold will be a benefactor to his actions.

I’m curious to see where the markets will open up on Monday if anything happens.

Have a wonderful Thursday.

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.


Huge List of Potential News Headlines That Could Boost Gold

The Market Gage - Dillon Gage's Precious Metals Newsletter

Where do I start? There is so much going on here in the States and around the globe that affects the price of gold in a positive way. I can hear the Wall Street Gold traders cheering the price of gold on with all the news to fuel their long positions, including:

  • A weaker dollar and treasury yields
  • Strong inflows into the Gold ETF s overnight
  • Weaker equities (Is the Trump rally over?)
  • Russia talking tough
  • Syrian issues
  • North Korea threat
  • Healthcare (when?)
  • Tax reform (if?)
  • The Democrats digging in their heels promising to fight tooth and nail on any bill or action proposed by The Trump administration.
  • If the President and congress fail to act we are looking at a potential U.S. government shut down without a budget on April 28. Hundreds of thousands furloughed employees, closed national parks, lack of government services and you better hurry up and get your tax return in because if the government shuts down so does your refund.

So with all this going on do you still believe the economic data will justify a rate hike anytime soon?

In the end how will the equity market react to all this news? One might think for the time being this news will stop any rallies.

And let’s not forget the French election right around the corner. And whether you believe it or not that Russia had anything to do with our presidential election, just look at what’s going on in France. Putin loves Marine Le Pen, the “golden lady.” Russia began financing Ms. Le Pen just after she travelled to Moscow in March to boost her international profile and to show the world the they both agree that a EU without France would be a good thing.

We all heard President Trump complain about fake news and now Ms. Le Pen’s main opponent Emmanuel Macron is publically accusing Russia of trying to discredit him through Fake news stories distributed by Kremlin run media channels. It will be very interesting to see how this election pans out. As I reported before, Ms. Le Pen said and still believes France is better off on their own without the EU. If France follows the UK and leaves, this will have a profound effect on the price of gold, that’s why we call her the “golden lady”.

I expect the gold rally to continue at a slow and steady pace. The price action could escalate in the event Kim Jong-Un decides to fire a missile on Saturday to celebrate their national holiday honoring their founder. Reuters has reported that North Korea might also be planning another nuclear test, its sixth, and if the U.S. retaliates, Kim Jong-Un threatens us with a nuclear attack.

As I said in the beginning of this report, there are a lot of things going on that can and will have a positive effect on the price of gold. The question remains when and how much. I cannot find any news except more rate hikes that can push gold in the opposite direction. We will just have to wait and see.

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.


FLASH GAGE – North Korean Concerns Driving Precious Metals Up

The Gold market is heating up as North Korea has issued a stiff warning to the U.S. CNN is reporting a statement from officials in Pyongyang, North Korea’s capitol saying that the “current grim situation” justifies North Korea’s “self – defensive and pre-emptive strike capabilities with the nuclear force at the core. We will make the U.S. fully accountable for the catastrophic consequences that may be brought about by its high-handed and outrageous acts.”

President Trump is talking tough in a tweet said, “North Korea is looking for trouble. If China decides to help, that would be great. If not, we will solve the problem without them.”

These strong words have gotten the Wall Street traders back into the gold market this morning. Last week when the U.S. hit Syria with missiles, everyone thought no big deal, this was a “one off,” so they ignored the news and when the market absorbed all the news the market sold off.

The potential showdown with North Korea is a completely different animal, and here’s why: In the event that this escalates, some Wall Street traders believe that congress will be so tied up addressing President Trump’s actions that healthcare and tax reforms will be put on the back burner. Remember, the Wall Street Gold traders are looking for a pop in the market where they can earn $15 or $20 dollars in a day or two and historically are not long term holders of gold.

This type of news plays right into their thinking as the rally starts off slow they buy in on the news and then the rally accelerates. And as I’m writing this comment that’s exactly what’s transpiring.

North Korea is looking at our deployment of 5000 sailors and 60 aircraft on the USS Carl Vinson escorted by guided missile destroyers USS Wayne E Mayer and Michael Murphy and the guided Missile cruiser USS Lake Champlain.

Saturday, April 15th, is a special holiday in North Korea. It’s the birth anniversary of Kim ll-sung, founder and President of North Korea. It’s the most important national holiday in the country. Kim ll-sung’s birthday, which has been an official holiday since 1968, was renamed Day of the Sun in 1997, three years after his death. A commentator on Fox news this morning said, “I wouldn’t be surprised if on Saturday to commemorate the holiday Kim Jong-un will launch a missile, which I’m afraid could be shot down by one our military cruise missiles.” If that happens only God knows how that would end.

The point I’m trying to make is you need to watch this market closely as the comments of one Wall Street Trader put it, “it would take only one tweet from the President to move the gold market in an unexpected way.” That’s why the Wall Street Gold Traders have been on the sidelines. But we all must believe that the next Trump tweet
will not be wishing Kim Jong-un a wonderful holiday. As we approach a three day holiday at the end of the week positioning yourself for the unexpected might be a wise move.

Seatbelts fastened. I expect the next few days we will see a very active Gold market.

Have a wonderful Tuesday.

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.


Gold Fails To Stay Above 200-Day Moving Day Average

The Market Gage - Dillon Gage's Precious Metals Newsletter

The attack in Syria and the poor jobs report cannot get gold to stay above its 200-day moving average at $ 1256.25 spot – number that all traders see as a level of support that must be maintained for gold to trade higher.

Subsequently, we are now back to the levels seen before the Syrian attack and the jobs reports were released.

Wall Street gold traders didn’t take the bait and remained silent for the most part during these events.

The dollar and Ten-Year Treasuries are trading sideways, keeping a lid on the price of gold.

Financial advisors and their clients seem content with President Trump’s economic agenda and are pretty comfortable as viewed by volatility levels across asset classes, especially with the dovish tone revealed most recently by the Fed.

At this juncture, with such calm equity markets, we see very few investors buying volatility protection against a downturn in the market – So much so, that the Implied Stock Volatility index is near historic lows. Still ahead, is the European elections and the continued turmoil in Congress on whatever President Trump puts before them. I can’t see the volatility remaining this low for too long as Russia and Iran are flexing their muscles with comments that they will respond with force to any future American aggression.

One spark, one trigger point can move our calm equity markets into a tailspin and give the price of gold a boost as witnessed last week with the Syrian attack. We will have to wait and see if the equity market can keep its rally alive, but I for one believe all the news of late is just the calm before the storm. As one financial advisor put it, “At this time I’m taking a cautious approach and asking my clients for their risk tolerance levels. Then I am moving forward protecting their profits realized since the election in the event something happens. Smart investors ride their profits and put scaling stop losses to protect what they already earned.” Sound advice for sure.

So today we watch the dollar and the treasuries as those two markets are the driving force for any future price movement in our metal markets ahead.

In the meantime:

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.


Overnight Gold Hit Five Month High After Missile Strike

The Market Gage - Dillon Gage's Precious Metals Newsletter

Last night, as soon as the news hit the wires that the United States had dropped tomahawk missiles on Syria, gold rallied $12 dollars. Far East traders reacted to the news and here in the States Algorithm programs kicked in. It wasn’t until the President made his speech that gold took another $5 leg up. As things calmed down, some short term trading profits were taken and now we sit and watch and wait to see if there are any repercussions to our actions.

Before the attack, I already had a comment I wanted to share with you today. With Gold up $ 11 dollars this morning solely on the attack last night and the dollar and Treasuries kind of flat, we now await precious metal’s reaction to the job numbers that just came out. In the meantime, I still think sharing these comments and news items makes a lot of sense.

Premiums softening as dealers see more products coming in the door than out. Tight trading ranges and continued retail interest in equities seem to be the major factors affecting our markets. But the main culprit is the Federal Reserve members current policy of sharing their unwanted opinions between meetings. I know I am repeating myself, but when the main players are absent from our market, like the Wall Street Traders who create liquidity, the market just sits there. One just needs to look at the CME Futures trading volumes of late to understand what is going on.

I am sure if the Chairwoman comes out and states that there will be no more sharing of opinions by Fed members our market will come to life again. Just look at the story this week on the resignation of Richmond Fed President Jeffery Lacker.

We all see the Dollar and 10-year treasuries trading in a tight range and those two items are the catalyst for any movement in the price of gold. But the Fed is driving the car and unfortunately has our road
cut off, and until a policy change is put in place I expect our car will be in park for a while.

But there is a lot going on around the globe and the U.S, isn’t the only country that has a say in the price of the yellow metal. You just have to look over the pond to see where the potential firestorm will erupt.

Here is one part of the world that can have a serious impact on the future price of gold, Greece.

Greece is back in the news once again as negotiations in Brussels between Greek ministers and bailout monitors get close to an agreement on pension cuts and labor reform. Athens has no choice but to adapt these reforms as more bailout money is desperately needed.

Greek prime minister Alexis Tsipras has asked for an emergency summit of EU leaders this month if the finance ministers fail to reach an agreement on the next bailout for Greece today. An agreement today will pave the way for a release of over six billion Euros to avoid a Greek default on its credit obligations in July.

As the country tries to keep afloat, we still see major hurdles to overcome. Greece’s unemployment rate is an astonishing 23.5 percent and according to the Greece state employment agency new claims have risen since the beginning of the year. The unemployment rate in Greece stands way above its EU partners where the average unemployment rate is 8 percent. Things are getting worse in the country as over half of the unemployed have been without a job for over a year. One interesting figure to share with you is that over 300,000 skilled young workers have left the country in the last 6 years to look for work elsewhere.

For the employed, they have seen big increases in taxes which in turn has helped the government in revenue collections this past year. That’s the only good news from the government prospective. Central bank officials are concerned with the amount of money that has been taken out of the banks in 2017. These funds were withdrawn by small to medium size companies worried about a failure to get bailout money which in turn could cause a banking crisis. Banks in Greece have a similar problem like their friends in Italy. Greek banks have almost a 50 percent non-performing loan portfolio on their books. I cannot imagine here in the states what would happen if we had a 23.5 percent unemployment rate and a bank loan default rate of close to 50 percent. There probability would be blood in the streets.

As I have written in the past, an exit from the EU by Greece, Italy, Portugal or Spain is highly unlikely. In my opinion they will hang around to the very end looking for a handout from the EU. And if France departs from the EU (remember the election in France is days away) this will leave Germany holding the never ending responsibility of keeping these countries afloat. When will it ever end?

As this saga continues and investment in physical Gold looks like a wise 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.


American Eagle Sales as of 4/6/2017

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

The following chart includes the year to date totals for 2017 from the U.S. Mint as of 5pm on April 6th. The chart also shows the change in sales from 3/30/2017 which we reported last Friday.

Gold
Coin Sales in oz. /#coins + from 3/30/2017
One oz.
125,000
125,000
1,500
1,500
Half oz.
12,500
25,000
000
000
Quarter oz.
11,500
46,000
500
2,000
Tenth oz.
19,500
195,000
500
5,000
Total
168,500
391,000
2,500
8,500
Silver
Coin Sales in oz. /#coins + from 3/30/2017
One oz.
8,212,500
8,212,500
255,000
255,000

Slightly Stronger Dollar Keeps Pressure On Gold

The Market Gage - Dillon Gage's Precious Metals Newsletter

We have a lot to talk about today, so let’s get started withtoday’s market information.
A slightly stronger dollar and higher Ten-Year Bond Yields here in the states and in Europe are keeping the pressure on the price of gold this morning.

Outflows overnight seen in both the gold and silver ETFs as the anticipated rally over the 200-day gold moving average got close, but never materialized.

Financial advisors are having a blast with this continued equity rally and not paying too much attention to commodities at this juncture.

Now the meat and potatoes:

Yesterday in a Flash Gage we shared a story released by Reuters, that Richmond Fed President Jeffrey Lacker revealed that in 2012 he shared confidential Fed information with a analyst regarding the Fed’s plan for economic stimulus.

And now five years later he decides to resign. Really? What took so long? The question I keep asking is WHY are the members of the Fed allowed to share anything between meetings at conferences or with the media? In my opinion, this is the main reason our markets lack volatility. And when the Fed shares their opinion between meetings, there are times our market moves in an unexpected way. This keeps traders and investors away from the market because they are afraid that one comment can blow their strategy right out of the water.

I prepared this story on Monday afternoon and was going to use it today as the base of my article, as luck would have it, it fits like a glove to the story above.

An article in Monday’s Wall Street Journal caught my eye and I wanted to share this with you as it brings to light what Minneapolis Fed President Neel Kashkari has been saying needs to be done before the Fed raises rates.

Here is what the article revealed.

This week the world changed. Fed Chair Janet Yellen apparently allowed a LEAK to the Wall Street Journal, published on March 31st, suggesting the Fed understands the problem. The Fed is taking off the table the idea there might be four rate hikes this year (remember what a firestorm
that theory was causing in our markets), but is putting on the table the idea that it will eventually pause on rate hikes and start reducing the size of the balance sheet as the normalization process continues.

At this point, the Fed is being slow and cautious and only planning on doing one thing at a time – rate hikes or bond sales. Later it might do both at the same time.

So what should investors expect? According to the Wall Street Journal, before the LEAK, it looked like the Fed would raise rates two or three more times this year, once in June and another time in either September
or December, with the possibility of hiking rates in both September and December.

Now the journal reports that they think the Fed will raise rates in June and September and then take the following six months to start the “Great Unwinding” of the balance sheet. The Journal goes on to say that they expect the Fed will take baby steps. It’s not outright and actively going into the financial markets selling Bonds from its balance sheet. Instead, it will take a portion (not all) of maturing principal payments on its Bond Portfolio (Treasury or Mortgaged Backed Securities) and not reinvest them into new securities, instead using that portion to extinguish excess reserves.

This cautious approach will not disrupt the bond market, but it will allow inflation to become more entrenched. The writers explained that as long as excess reserves exist, rate hikes will make it more profitable for banks to lend those excess reserves. This expands the money supply and creates inflation.

They go on to say that what this means for the economy and financial markets is the Fed is highly unlikely to become a drag on growth anytime in the near future. And since the number one cause of a recession is an excessively tight Fed, they think investors should watch this process
carefully, but not be alarmed by it.

It is my hope that the Fed does reduce its balance sheet, but with less rate hikes. But what disturbs me most is what is going on in Washington. There seems to be a level of hatred between both parties this country has never seen before. And the sad part is it seems there is no one on planet Earth that can or is willing to do anything about it.

But getting back to my main argument. Why is the Chairwoman sharing her thoughts with the Wall Street Journal between meetings? In their story they used the word LEAK. How appropriate was it to yesterday’s story? Enough is enough. It’s time to do something about it.

Our country has so many issues to battle and I cringe to think where this country is headed. With all the debt this country is facing we should not be cheering how many new millionaires the Trump rally has created, but bring up the less fortunate to a level where they become part of the solution and not part of the problem.

I believe all this madness will produce a major rally in the price of gold. I just think it will take some time. Whether the rally will be created from across the pond with the breakup of the EU or uncontrollable debt this country will face with the cost of healthcare, entitlements and infrastructure. It looks to me it’s a year or two away but I believe it’s coming.

The question is when will you join the club and get started cost averaging your investment with physical gold and silver? A smart investor should have a balanced portfolio and what better product to hold in their portfolio as a hard asset is an investment in physical metals? The clock is ticking!

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.


FLASH GAGE – Potential Fed Leak Bomb Shell?

Fed leak and I’m not surprised …….

Reuters Reporting, Here’s their story: Richmond Federal Reserve President Jeffrey Lacker left the U.S. central bank on Tuesday after saying a conversation he had with a Wall Street analyst in 2012 may have disclosed confidential information about Fed policy options. “It was never my intention to reveal confidential information,” Lacker said in a statement describing an Oct 2, 2012 conversation with an analyst from Medley Global Advisors.

The next day, Medley Global Advisors unveiled details of a September Fed policy-setting meeting, one day ahead of the publication of the central bank’s own record of the discussions. At the Fed meeting, officials laid the groundwork for the massive bond-buying stimulus they were to roll out later that year. Early knowledge of that discussion could have given traders an unfair edge.

Lacker, whose departure from the Fed was effective on Tuesday, said he may have broken a policy “which prohibits providing any profit-making person or organization with a prestige advantage over its competitors.” The Medley report triggered furor in the U.S. Congress, becoming a source of friction between the central bank and lawmakers and leading to a criminal investigation.

In May 2015, then Financial Services Committee chair Jeb Hensarling, a Texas Republican who has called for stricter Congressional oversight of the central bank, subpoenaed Fed documents and communications related to the leak.

Oh boy, this story is huge, and in my opinion, can have a lot of legs attached to it. Stay tuned…

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.


Precious Metals Start Second Quarter on Quiet Note

The Market Gage - Dillon Gage's Precious Metals Newsletter

We start the second quarter of 2017 on a quiet note. The price of gold slightly lower in negative territory this morning as we witness a slightly stronger dollar and higher bond yields.

Wall Street gold traders are starting to sound like the frustrated physical gold dealers I speak with daily, complaining about the lack of price movement in gold.

Financial advisors see little interest of late in the gold ETFs from retail investors. The Gold ETF overnight saw 155,000 ounces put into the funds by what it looks like are predominantly institutional inflows. If you look at the inflows and outflows in gold in the ETFs over the past few weeks in a bar graph, for the most part one can draw a pretty straight line across the top indicating the movement is just small volumes changing hands.

It’s no surprise that the love affair continues in the equity market, taking all the daily headlines
away from other markets.

CME future volumes on the low side this morning, indicating not too much interest from the Far East and Europe overnight. Even my trading friends in the Far East are tired of sitting on their hands and, just like their Wall Street counterparts, are dying for some action.

Even the guys who do a great job predicting the future price movement in gold using just charts have commented to me that their charts are starting to flat line, so to speak.

I must admit I feel the traders pain, because as I write these articles I too struggle to come up with interesting stories to share when the markets lack price movements.

So I will leave you with this thought.

My mother always said, “Count your blessings. If you wake up each morning and you are not in a hospital
bed it’s a good day.”

So as bad as it sounds, things could be worse.

Hang in there and 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.


Fed Comments Suppress Gold

The Market Gage - Dillon Gage's Precious Metals Newsletter

Fed comments continue to suppress the price of gold.

We end the week with dollar index and Ten-Year Treasuries virtually unchanged. Wall Street gold traders continue to be absent from trading as the market seems to have no definitive direction. One gold trader I spoke with this morning said, “For the time being, I’m having better results trading in the oil market.”

Small outflows overnight reported in all four metals in the ETF arena.

Now to the news across the pond.
Continue reading “Fed Comments Suppress Gold” »


American Eagle Sales as of 3/30/17

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

The following chart includes the year to date totals for 2017 from the U.S. Mint as of 5pm on March 30th. The chart also shows the change in sales from 3/23/2017 which we reported last Friday.

Gold
Coin Sales in oz. /#coins + from 3/30/2017
One oz.
123,500
123,500
1,500
1,500
Half oz.
12,500
25,000
000
000
Quarter oz.
11,000
44,000
500
2,000
Tenth oz.
19,000
190,000
000
000
Total
166,000
382,500
2,000
3,500
Silver
Coin Sales in oz. /#coins + from 3/23/2017
One oz.
7,957,500
7,957,500
320,000
320,000

Dillon Gage Metals Up for Prestigious Industry Awards

Platt's Global Metals Award Finalist 2017
2017 Platts Global Metals Awards Committee Names Dillon Gage Finalist

ADDISON, Texas (March 30, 2017) – Dillon Gage Metals, an international precious metals wholesaler, has been selected as a finalist by the Platts Global Metals Awards Selection Committee in two categories. The awards are conducted by S&P Platts, the leading independent provider of information and benchmark prices for the commodities and energy markets with over 30,000 subscribers globally. Dillon Gage Metals was nominated as a finalist in the following categories:

  • Precious Metals Industry Leadership Award
  • Physical Metals Service Provider of the Year Award

“What a prestigious honor for our organization to be considered a finalist in these categories, which reflect industry leadership and service,” stated Terry Hanlon, president of Dillon Gage Metals. “To get this type of recognition is a credit to each and every employee who works on behalf of Dillon Gage Metals and our valuable network of precious metals dealers.”

The Platts Global Metals Awards are bestowed on deserving candidates, singling out those who drive the precious metals industry to new heights—including excellence in leadership, innovation, safety, integrity and overall performance.

The 2017 Platts Global Metals Awards will be presented at a black-tie gala on Thursday, May 18, at Marriott Grosvenor Square in London.

For more information, please visit www.dillongage.com or call (800) 375-4653.

# # #

About Dillon Gage Metals
Dillon Gage Inc. of Dallas (DillonGage.com), founded in 1976, companies include:

  • Dillon Gage Metals (www.DillonGage.com/Metals), one of the world’s largest precious metals wholesale trading firms. The firm is an authorized purchaser for all major world mints and maintains inventory in over 20 countries around the world. Additionally, the company provides advanced tools and technologies that enable market participants to be more successful in their businesses, allowing electronic trading and offering cloud-based solutions for the physical precious metals marketplace 800-375-4653
  • FizTrade Online Trading (www.FizTrade.com) offers real-time bid/ask trading platform for gold, silver, platinum and palladium. 800-375-4653
  • Dillon Gage Refining (www.dillongage.com/refining/why-dg), professional assayers and refiners of precious metal scrap, from low grade to karat scrap. Stone removal services and diamond experts on staff. 888-436-3489
  • International Depository Services Group with locations in Delaware, USA (www.ids-delaware.com; 888-322-2431), and Ontario, Canada (www.idsofcanada.com; 855-362-2431), offers secure, efficient and insured precious metals and certified coin depositories that focus of custom business logistics solutions which include storage, fulfillment, inventory managements and many other value-added services.

Contact:
Jeffrey Cheatham
Senior Account Manager
TrizCom PR
(972) 247-1369
jeffc@trizcom.com


Gold Taps The Brakes As Wall Street Breathes Easier

The Market Gage - Dillon Gage's Precious Metals Newsletter

Walter Pehowich is off today. A senior DG Staffer provided today’s commentary.

Wall Street is breathing just a tad easier with the market jumping 151 points on Tuesday, ending nine consecutive days of losses, the worst streak since 2011. It appears investors may have been spooked by the stunning rejection of health care reform last week, with thoughts now turning to President Trump’s tax reform plans. Will this initiative meet the same fate? Only time will tell.
Continue reading “Gold Taps The Brakes As Wall Street Breathes Easier” »


Gold Hits Four Month High And Equities Open Much Lower

The Market Gage - Dillon Gage's Precious Metals Newsletter

Wall Street’s frustration with Washington’s gridlock gives gold a boost this morning. Equities to open much lower as retail investors scramble to put their stop loss orders in on the Dow Industrial’s open. Taking some profits off the table could be a wise move right now.

Last night when I was watching the action in the Far East, it was apparent that gold and silver would be opening stronger here in the States. The activity in the dollar was brisk, trading lower versus other world currencies. Currently the dollar index is trading at 98.89, down 88 basis points which helps the rally in gold.

Also giving gold a boost are the World’s Ten-Year Bond yields which are all lower on the day.
Continue reading “Gold Hits Four Month High And Equities Open Much Lower” »


Gold, Dollar and 10-year Treasury Bills All Locked In

The Market Gage - Dillon Gage's Precious Metals Newsletter

President Trump flexing his muscle and demanding a vote today on his health care bill. We all know the President hates to lose and if he doesn’t get his way he will move on to tax reform.

The equity market likes tax reform and in my opinion has little interest whether the health care bill passes or not. Case in point the equity market at 9:30 is showing a positive opening.

On the other hand Gold for the time being seems to be locked in at these current levels. The dollar and Ten-Year Treasury yields are also locked in their levels with little or no change on the day. So the price of gold and silver just sits here.

Frustration is the word I constantly hear from most gold dealers. One thing I will not attempt is to make a phone call to any of my Wall Street trading friends to ask their opinion on the market. I don’t want to lose their friendship.

Boring as it seems, the CME gold and silver volumes seem to have healthy activity day in and day out.

So there is still good interest in our market, unfortunately the lack of any news reduces the volatility, which in turn keeps the big players out of the market for the time being.

We at Dillon Gage constantly monitor all the news services around the globe every day to keep our readers informed on any potential news stories that affect the precious metals markets. However there are some days where there just isn’t much to share, no matter how hard you look, and today is one of those days.

I can talk about Durable goods orders released today or what we can expect to hear from San Francisco Fed President John Williams or St. Louis Fed President James Bullard or New York Fed President William Dudley who are all scheduled to speak to the media today. All my readers know what I think about Fed Presidents speaking between Fed meetings, so yes I’ll listen, but I really don’t see any point in doing so.

As my mom always told me, where there is life there is hope. So I’ll keep the window open with my binoculars in my hand scouring the world for some news that will get our market moving again.

I wish you all 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.


American Eagle Sales as of 3/23/17

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

The following chart includes the year to date totals for 2017 from the U.S. Mint as of 5pm on March 23rd. The chart also shows the change in sales from 3/16/2017 which we reported last Friday.

Gold
Coin Sales in oz. /#coins + from 3/16/2017
One oz.
122,000
122,000
8,500
8,500
Half oz.
12,500
25,000
000
000
Quarter oz.
10,500
42,000
000
000
Tenth oz.
19,000
190,000
500
5,000
Total
164,000
379,000
9,000
14,000
Silver
Coin Sales in oz. /#coins + from 3/16/2017
One oz.
7,637,500
7,637,500
795,000
795,000

Gold Hits 3-Week High on President’s Health Care Comment

The Market Gage - Dillon Gage's Precious Metals Newsletter

Gold yesterday settled close to a 3-week high and was up for the fourth day in a row.

What pushed the up button yesterday were comments made by President Trump after his Town Hall meeting with Conservative Republicans. As President Trump exited the meeting a reporter asked if he believed that he has all the votes needed to pass the Health Care Bill on Thursday, he expressed a not so sure response. At that point stocks headed south falling 237 points for the day and gold rallied double digits. The concern for equity investors is that the chance of a derailment of the Health Care Bill would stall the expected tax cuts, which in turn would slow down the economy and then reduce the chance of further rate hikes.

Case in point: On that news the Dow took a bath yesterday and Gold found some new buying interest.

Looking at the factors that affect the price of gold this morning is a slightly stronger dollar and softer Ten-Year Bond Yields around the globe keeping the price of gold virtually unchanged.

As I indicated in Monday’s comment, the markets seem to be in suspended animation looking for some news to grab onto to give some promise of a future direction in Equities and the price of Gold. Just look at how ONE comment yesterday changed impacted the markets.

As one Wall Street Gold trader put it: “I’m hesitant getting back into the market again, as one tweet from the President can have an adverse effect on the dollar or one comment by a Fed President can have a major impact on the price of Gold. I just can’t take that risk right now. I’d rather wait for things calm down. The question remains when?” This comment gives everyone a good idea of the fear factor in the market. Any unexpected comment from any official can create a market firestorm.

Yes, I think we all can agree that the equity market has had a great run since the election and Gold has held up pretty well with all the negative news of higher interest rates and a stronger dollar. But now with all the squabbling in Washington over Obamacare and future tax cuts; and relatively no movement to speak of (looks like he doesn’t have the votes to pass the bill tomorrow), the markets are now questioning if it is at all possible that a new Health Care Bill and tax cuts (both corporate and individual) can be in place by Aug 31st as the Republicans had promised.

No matter what party you call your own, it appears that this is only the beginning of total gridlock coming down the pike in Washington. Anyone surprised?

You can be sure both party’s futures are hanging on these bills being passed. The country is watching very closely.

Just ahead are billboards that say, watch out for North Korea, Iran and Russia. Going forward, anyone of them could put a land mine in the road totally stopping any Trump agenda.

So, looking at the issues, I for one must question the ability of the equity markets to continue their rally without a quick passage of all the bills that the Republicans had promised. With all that’s going on in Washington one could also take the stance that we probably can expect that Fed Chairwoman Janet Yellen will keep her dovish stance. If that occurs, then gold has a good chance of moving higher. Let’s not forget that just a year ago the Fed Presidents had called for 5 rate hikes and we got one. What do you think will happen to future rate hikes if Washington is out of control? If President Trump’s agenda fails, where will the positive data come from supporting the next rate hike?

If North Korea becomes more of a problem or the investigation starts to show more Russian involvement in our country’s affairs or if anyone of the President Trump’s personal cabinet allies have issues, both houses will have their hands full.

If any or all of this plays out, the financial road to success could be paved with GOLD.

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.


FLASH GAGE – Dow Drops and Gold Climbs

The Dow is down over 180 points at the time of this report this morning after being in positive territory early in the day. President Trump had a town hall session with the Conservative Republicans this morning who wanted to add amendments to the Health Care Bill before indicating they might be on board helping pass the bill on Thursday.

As President Trump exited the meeting he expressed a not so sure response to the question
asked by a reporter if he believed that he has all the votes needed to pass the Health Care Bill.

At that point stocks headed south and gold rallied. A derailment of the Health Care Bill stalls the expected Tax cuts which in turn slows down the economy which in turn reduces the chance of further rate hikes. Case in point: Gold is now up nine dollars after trading lower in the early morning hours.

Have a wonderful Tuesday.

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.


Gold Up A Bit On Slightly Weaker Dollar

The Market Gage - Dillon Gage's Precious Metals Newsletter

We start the week with gold up just a little, off of a slightly weaker dollar and softer treasury yields.
The prices of both gold and silver seemingly in suspended animation looking for some news to give the price a direction to head into.

One might not argue that the equity markets are experiencing the same dilemma.

Wall street gold traders continue to be on the sidelines because of the lack of volatility.

Overnight both gold and silver ETFs showed redemptions.

Without any other news to report let me share with my readers the reason, in my opinion, we are in this situation in the first place.

At least there is one person at the Fed that makes some sense.

Before I reveal that person’s name, I have to share with my readers my frustration. What I don’t understand is how the Fed Chairwoman can say, “the data has NOT noticeably strengthened,” and at the same time say that, “future rate hikes will be data dependent” ? She then followed up with, ”there will be THREE rate hikes in 2017.” Can someone tell me what I’m missing?

These comments move the price of gold in unpredictable ways. Just look at last Wednesday. Yes we all expected a 25 basis interest rate hike. Ok, no argument there. But where did the market get the impression that four rate hikes were in order? Is it possible the market was looking forward to a continuing equity rally in 2017? Or did the market just base it on how many more Fed meetings this year that one could anticipate a rate hike? Or did the market get it from one of the Fed voting members at one of their “why in the world are you saying anything about future rate hikes” press conferences?

As soon as the Chairwoman revealed a dovish tone in her comments the price of gold reacted as IF there will be “NO” more rate hikes this year and traded up $30 dollars on the news. So in reality, her comments caused a firestorm. The shorts, and there were many who read the tea leaves so-to-speak, had to cover in an heartbeat. How can any trader or investor predict these kind of market movements?

What is this world coming to? What ever happen to supply and demand issues that used to move the price of gold. Has the media and politics taken over so much that a smart, informed investor has become clueless and helpless, set up by the FED to dictate whether their investment will make money or not?

Before I give you the name of the only person who seems to have any clue, let me give them a fix to this problem. To give every trader and investor a level playing field to conduct their trading strategies, here is my take on what should be done:

  • First and foremost stop immediately any voting or non-voting members between FED meetings from sharing their options to the media at a press conference or any other function for that matter. Basically imposing a gag order on all members.
  • Second, let the Fed minutes speak for themselves. That would work well for everyone to understand what really happened behind closed doors.
  • Third, let the Chairwomen be the only person at the FED to share the opinions of all after any scheduled Fed meetings. And last tell the FED not to be too concerned about their reputation, it cannot
    get any worse.

Now, thank you for waiting. The person I’ve been alluding to is…Neel Kashkari, Minneapolis Federal Reserve Bank President. He was the lone dissenter at the last Fed meeting. His position was to hold rates steady because, as he put it, “the U.S. economy is still falling short on employment and inflation.” What makes total sense to me is where he indicated the Fed should wait to raise rates until it publishes a detailed plan for how and when it will reduce its 4.5 TRILLION balance sheet. One doesn’t have to have a degree in accounting or economics to believe that this statement makes sense. He also indicated that inflation is still short of the Fed’s mandate of 2 percent and that the labor market is still showing signs of slack, so keeping the rates steady would have been the appropriate move.

One must know that any change in rates has a profound effect on all Americans. For the ones trying to buy their first home or for the ones trying to pay down their credit card debt. Before any decision is made, we should be at close to or full employment and see wage growth for all. From the minimum wage worker to the average American trying to get by from paycheck to paycheck, these considerations should be first and foremost. Yes it might sound like I’m running for political office, but if the Fed would close all the text books and look out the window they might have a better understanding where America is today.

I feel better now.

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.


Gold Holds Its Breath While All Eyes Are On G20

The Market Gage - Dillon Gage's Precious Metals Newsletter

All eyes on the G20 meeting of the Finance Misters and Central Bank Governors which starts today in Germany.

Ahead of the G20 meeting, some European leaders have expressed concerns about the Trump administration plans for removal of some regulations which they see necessary for global banking stability.

Representing the U.S. for the first time will be President Trump’s handpicked Treasury Secretary Steven Mnuchin, who is expected to put pressure on some countries to increase the value of their currencies. The Treasury Secretary is carrying a message from our President that countries that export to the U.S. must stop their practice of keeping their currencies weak against the dollar for their own gains which in turn gives them an unfair trading advantage.

Data here in the states released today at 9:15 is industrial production and capacity utilization and followed at 10 am by consumer sentiment and leading indicators. Unless some surprises are revealed, I expect the price of gold to be pretty steady ahead of the news out of the G20 meetings today and over the weekend.

A mixed bag of items to share this morning. The dollar showing modest gains and the U.S. ten-year treasury bond yields are off slightly. The Gold ETFs saw small redemptions.

Far East gold traders, as well as our Wall Street Gold traders, indicate that at this point they have little interest in putting on any positions. Most have indicated they will wait for some news and direction in the price before jumping back in.

So the price of Gold just sits in limbo until some news emerges as traders and investors await patiently for any indication of which way gold will be headed next.

For those following the technical levels, the gold resistance levels are at $1,234 and $1,248, while silver is at $17.48 and $17.72.

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.


American Eagle Sales as of 3/17/17

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

The following chart includes the year to date totals for 2017 from the U.S. Mint as of 5pm on March 16th. The chart also shows the change in sales from 3/9/2017 which we reported last Friday.

Gold
Coin Sales in oz. /#coins + from 3/9/2017
One oz.
113,500
113,500
2,500
2,500
Half oz.
12,500
25,000
500
1,000
Quarter oz.
10,500
42,000
500
2,000
Tenth oz.
18,500
185,000
2,000
20,000
Total
155,000
365,000
5,500
25,500
Silver
Coin Sales in oz. /#coins + from 3/9/2017
One oz.
6,842,500
6,842,500
220,000
220,000

Gold Up on weaker dollar – driven by Fed Dovish Tone

Yesterday Janet Yellen stopped short of predicting four rate hikes this year, weakening the dollar and treasury yields which in turn gave gold a Boost. She stated policy is not set in stone and is totally dependent on developing economic data.

When the news came out at 2pm yesterday, Gold investors took that statement as a buying opportunity. The gold market was very nervous that the Feds would announce an additional rate hike to four in 2017 and when the Chairwoman exhibited a dovish tone and indicated they are calling for only three, gold rallied $ 19.00 quickly. Nervous shorts ran for cover especially when broke thru the $1,215 level.

Retail sales are still weak and we all await on the next GDP results to be released on March 31st. So with growth in the economy still in question this gives doubt that her three rate hikes are a sure thing. This should support the price of Gold in this area and bring in new buyers into the fold.

The Chairwomen also said that its inflation target is still 2 percent and can vary on both sides of that number.

What doesn’t make any sense to me is how Ms. Yellen can call for three rate hikes this year and at the same time declare that future rate hikes will be data dependent. Maybe she has a crystal ball. I just don’t get it.

Gold this morning finding new investors pushing the price up over thirty dollars on the day.

The Dutch election didn’t go as the gold market hoped for, nonetheless Gold still looking strong this morning.

I expect this Gold rally to lose some of its steam as I believe you have seen the highs at $1,234 in the April futures contract today.

For the third day in a row, gold ETFs have seen inflows into the funds. Three day total increases by over 450,000 ounces.

Some Wall Street gold traders took it on the chin on this last move and for the ones I spoke to are out of the market for the time being.

What comes to mind is all the plans of the new administration to include the costs of infrastructure, military spending, replacing Obama care, tax cuts both corporate and individual, increased costs of entitlements as we see 10,000 baby boomers retiring every day. Where will we find the money to cover these “massive” expenditures without dramatically increasing the debt ceiling .

What baffles me is if this all comes into play inflation will be out of control and the Fed will be once more behind the curve trying to explain their position.

So, only time will tell how this plays out. In the meantime the next move in the gold market is anyone’s guess.

Have a wonderful Thursday.

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.


Lots of Gold-Impacting News to Share

The Market Gage - Dillon Gage's Precious Metals Newsletter

A lot of news to share with you this morning.

All eyes on the Fed today with the results on interest rates to be revealed at 2pm ET. The street expecting a .25 basis rate hike. The CME Watch tool has the odds of a rate hike at 90.8 percent this morning. All will be listening to the Chairwoman’s comments at the press conference after the announcement. Her view on the economy and how many more rate hikes she expects this year are on the minds of all traders and investors.

It would be interesting to hear if there were any voting Fed members who wanted to raise rates 50 basis points at this meeting to show the world they are ahead of the curve. Any surprises will have a profound effect on all the global markets.

Continue reading “Lots of Gold-Impacting News to Share” »


Gold Treading Water To Start Week

The Market Gage - Dillon Gage's Precious Metals Newsletter

The price of Gold starts the week treading water above the $1,200 dollar level. Not helping the holders of long positions in Gold were the 300,000 ounces redeemed overnight in the Gold ETF arena.

Keeping Gold afloat is a slightly weaker dollar and softer 10-Year Treasury Yields around the globe. The U.S. is the only one that has their Ten-Year Yield Bonds in positive territory this morning.

Commitment of traders report from last week showed funds reduced their long positions by 17,000 contracts and added 13,000 new shorts to their positions.

Levels of support in Gold not seen until we test the $1,182 level in the spot price. Silver support not till $16.68.

The Wall Street Traders I spoke with this morning are still content with their short positions. If you remember last week they indicated that going short at the $1,210.50 level which was a 50 percent retracement level from the highs.

All eyes on the Fed Wednesday as the probability of a rate hike still standing at 88.6 percent according to the CME Watch tool indicators. One must believe a 25 basis rate hike is a sure thing at Wednesdays meeting. What the street is waiting for is the press conference after the Fed announcement with Chairwomen Janet Yellen to hear her thoughts and comments on the economy and the possibility of future rate increases.

I expect a couple of quiet trading sessions till then.

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.


Lots Of News Headlines Impacting Precious Metals

The Market Gage - Dillon Gage's Precious Metals Newsletter

Here are the Friday morning headlines we are watching that are impacting precious metals.

Overnight, selling out of the Far East brought the yellow metal down to $1,194.50 in the April CME Futures contract.

This morning, gold now seen gaining momentum, reversing the most recent sell bias indicators trading over the $1,200 dollar level this morning.

The reason for the recovery this morning is a weaker dollar and softer ten-year treasury yields.

The strongest component in the gold price is the action in the U.S. dollar vs. other world currencies.

Continue reading “Lots Of News Headlines Impacting Precious Metals” »


American Eagle Sales as of 3/10/17

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

The following chart includes the year to date totals for 2017 from the U.S. Mint as of 5pm on March 9th. The chart also shows the change in sales from 3/3/2017 which we reported last Friday.

Gold
Coin Sales in oz. /#coins + from 3/2/2017
One oz.
111,000
111,000
3,500
3,500
Half oz.
12,000
24,000
000
000
Quarter oz.
10,000
40,000
000
000
Tenth oz.
16,500
165,000
1,000
10,000
Total
149,500
340,000
4,500
13,500
Silver
Coin Sales in oz. /#coins + from 3/2/2017
One oz.
6,622,500
6,622,500
280,000
280,000

FLASH GAGE- European Central Bank Pres. Comments Give Gold A Little Hand

As we monitor all news from around the world, today we are watching live the press conference of ECB President Mario Draghi. Here are the headlines:

The European Central Bank announced this morning no change in their benchmark interest rate. Right after the news, gold caught a bid and the selloff of the yellow metal stalled.

ECB President Mario Draghi said he would continue his asset-buying program. He seems to be hedging himself, giving the impression he’s not sure on future economic conditions in the European community. He said there are so many geopolitical issues facing many countries in the EU.

This is a sharp contrast to what’s happening here in the states.

His comments seemed to have strengthened the Euro and weakened the dollar temporarily. He says his goal is to strengthen the Euro and make it more resilient versus
other world currencies.

I expect after this press conference is over, the dollar will recover and so will the selloff in the precious metal markets.

Have a wonderful Thursday.

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.