This is President’s day and the overall markets are closed. Futures are showing a higher stock and oil market with much lower gold and silver prices. European markets are higher as is most of Asia, although the Japanese economy declined last quarter and China’s exports were down almost 6% and imports down 14%.
So how does bad economic news translate into higher markets? The thought is that it will push the Fed and central banks into more easing so that people betting on stocks believe it will be positive for their holdings. Remember that the US Fed only has 25 basis points to work with so that reasoning is questionable and frankly means we would be going back to where we were and that nothing has progressed.
As we said in our last commentary, we will more likely than not see continued volatility across the spectrum of investments including the precious metals markets.
One thing is for sure, the fear factor among Americans and others across the world is high. One has only to reflect that people used to buy the good quality stocks for the long haul. In fact, in the 1960s the average hold for stocks was 8 years, but now is only four months.
People just don’t know what to do and are unsettled as to what business creation or investments to make. Add to this uncertainty the death of Scalia and the coming war over his seat on the Supreme court and we have real angst among us all. The reality is that all these concerns do not translate into a strong, vibrant economy and political stability.
So what does it mean for metals? As our recent markets have shown, metals are seen as a safe haven for this uncertainty, but will have a lot of movement along the way. The main question that our investment folks deal with at Dillon Gage is “where in the world do I put my money” and there you have it.
A word of caution, with all this turmoil, don’t get drawn in to the scam artists promising unreal returns or “deals” in the metals markets that are too good to be true. Dillon Gage has provided quality service and great pricing for forty years and will be rock solid for your future. We are here for you, your business and your families.
Stephen W. Miller founded Dillon Gage in 1976 after a long career in the brokerage industry. Mr. Miller has a breadth of experience from company management to investment banking services, leading NASDAQ small cap market companies through both first and second tier financing, to taking several organizations through the successful completion of their initial public offering. Mr. Miller and Dillon Gage Inc. have been members of the Chicago Board of Trade and the New York Mercantile Exchange. Mr. Miller is also the co-founder and President of HELPS International.
Author Name: Walter Pehowich
Walter Pehowich is the executive vice president of precious metals investment services for Dillon Gage with over 38 years of experience in precious metals investment services. His career began in 1977 at Bache (which evolved to Prudential-Bache Securities and then Jefferies Investment Bank). While at Jefferies, he served as senior vice president with oversight of investment grade precious metal products. Pehowich holds a National Futures Association (NFA) Series 3 license, authorizing him to advise and sell alternative investments in commodities and futures markets.