Investors are focusing on strong expected corporate earnings this week, turning a blind eye to the Precious Metals arena.
Some Wall Street Gold traders indicated this morning that they expect the price of Gold to break thru the $1,308 support level sometime this week. Then the $1,300 dollar level will be in play. If that level is violated, $1,292 could be reached in a heartbeat. Maybe this is what the market needs to flush out the ones holding on to their long positions. We are way overdue for a market correction.
If Gold retreats, the price of Silver should follow. Traders are looking for support at $16.00.
If that level is violated then $ 15.78 is next on tap.
The dollar continues its slow movement upward. Ten-Year Treasury yields have seemed to have stalled below the 3 percent level. A settlement above 3 percent will give the shorts in the Gold market confidence that lower prices are right around the corner.
ECB Follows It’s Own Road
European Central Bank (ECB) is not following the same path as the U.S. Fed.
The European Central Bank started the year believing they would be able to remove their crisis era stimulus, but after meeting in Frankfurt this past Thursday they were not sure it would be possible.
Economists are pointing out the most recent weak data over the pond, with more expected in 2018 keeping the ECB Bond buying program in effect into the first quarter of next year. Economists are predicting inflation to be kept in check and growth to be weaker for the rest of the year.
They are referring to a report regarding German business sentiment, as it has weakened
in April, and expect furthering slippage in the months ahead. Confidence in manufacturing
as well as in the service arena has dropped indicating that there might be a tough road ahead
in these sectors.
So at this point, no matter what the U.S. does the ECB doesn’t expect to raise rates until 3rd quarter 2019.
It seems the U.S. is the only country with their finger in the trigger to aggressively raise rates.
As we all know, Precious metal investments are a global product and one cannot expect one country, even the U.S., to control the direction of the yellow metal.
Have a wonderful Monday.
Disclaimer: This editorial has been prepared by Walter Pehowich of Dillon Gage Metals for information and thought-provoking purposes only and does not purport to predict or forecast actual results. This editorial opinion is not to be construed as investment advice or as a recommendation regarding any particular security, commodity or course of action. Opinions expressed herein cannot be attributable to Dillon Gage. Reasonable people may disagree about the events discussed or opinions expressed herein. In the event any of the assumptions used herein do not come to fruition, results are likely to vary substantially. It is not a solicitation or advice to make any exchange in commodities, securities or other financial instruments. No part of this editorial may be reproduced in any manner, in whole or in part, without the prior written permission of Dillon Gage Metals. Dillon Gage Metals shall not have any liability for any damages of any kind whatsoever relating to this editorial. You should consult your advisers with respect to these areas. By posting this editorial, you acknowledge, understand and accept this disclaimer.