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.