Oil hits 71 dollars a barrel this morning and equities are on a roll, so investors seemingly are turning a blind eye to the Precious Metals arena.
I’m sure you are frustrated as I am with the lack of volatility in the price of Gold. I just keep looking for a catalyst to move the needle but I just cannot find one.
So range bound, we remain hoping for some news that can take us higher.
Gold Across The Pond
On Monday, the Euro fell to its lowest level of this year as weak economic data continues to plague the European community.
The data released last week revealed that the Eurozone economy slowed to the weakest pace in 18 months.
The Euro is also under pressure from the strength of the U.S. Dollar. Strong U.S. economic data and unemployment figures going under 4 percent give the Fed the ammunition it needs for further rate hikes. In contrast, it’s the complete opposite over the pond where rate hikes are totally out of the question for the foreseeable future as their economy struggles along.
The CME Fed Watch Tool is indicating that three or four rate hikes are predicted this year. Obviously these hikes will have to be supported by continued strong economic data.
Investment demand for physical Gold over the pond continues to be sluggish at best. Traders there point to the stronger dollar, uncertainties in the German economy and the future of the Brexit negotiations. Germany, the EU’s strongest economy, showed new factory orders in March dropped 0.9 percent. And last month, the German government cut its 2018 growth forecast from 2.4 percent to 2.3 percent.
Germany is the EU’s largest exporter to the U.S., so the possible threat of a trade war with America is making many German businesses rein in spending.
The global Gold market will have to watch what happens here in the States for direction.
Have a wonderful Wednesday.
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.