The European Central Bank’s announcement yesterday of a bigger than expected QE program was a welcome surprise for equity and bond traders as both saw broad-based buying globally. As would be expected, the USD rallied sharply with the Euro / USD falling over 3 cents as it trades below 1.12. While gold is showing signs of struggling with its continuing pivots around $1,300.00, it has rallied sharply in Euro terms as well as other currencies.
With regard to the QE program, it calls for purchases of investment grade bonds and asset backed securities totaling 60 billion Euros per month through September 2016. In overnight news, King Abdullah of Saudi Arabia passed away and the situation in Yemen grows worse as rebels have forced the president to resign. While an overnight rally in crude oil did not hold, uncertainty in the region has always been supportive for precious metals. Silver continues to hold above $18.00 as physical demand has been brisk all week, but speculative buying appears to weaken as we approach $18.50. This morning finds volume unusually light for a Friday as traders and investors may be moving to the sidelines as we await news out of Greece on Sunday.
This editorial has been prepared by Roy Friedman 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. Reasonable people may disagree about the opinions expressed herein. In the event any of the assumptions used herein do not prove to be true, 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 the foregoing.