After the poor jobs number on Friday, the market now awaits comments from Fed Chairwoman Janet Yellen. Ms. Yellen scheduled to speak today at 12:30 eastern time in Philadelphia.
When I first started in this business almost 40 years ago, the news items that seemed to move the gold market the most, were news on inflation and supply and demand concerns. Now for the most part, the market holds its breath on every comment made by any Fed official regarding interest rates, watching the action in the dollar and unemployment / jobs news.
Over the years with the advancements in technology, going from an open outcry precious metal arena, run by floor brokers, to a faster than the speed of light electronic trading platform, the price of gold has no trouble moving large volumes with large price swings. Friday morning, right after the job numbers were released, we witnessed a $34 dollar move to the upside in gold, in a blink of an eye. In the old days, a move like that could take hours, not minutes.
Now more than ever we truly have a global economy, and before the Fed considers any move to increase interest rates, they can’t ignore the issues that move the markets globally. Negative interest rates in some countries, the Brexit vote June 23rd, the economic cost to Europe regarding the migrant crisis has to be on their minds.
And how can they ignore, our own problems? The increasing cost of our entitlement programs, our ever increasing nations debt issues, a congress in locked down mode and seemingly the most important issue facing our nation, who will be our next president?
With all these problems, has physical gold ever shined brighter? Maybe Ms. Yellen will give us some insight today.
In the meantime, I’ll just reminisce when life was a lot simpler. What baseball players card should I use with a clothespin on my bikes’ spokes, to make that great loud clicking sound and how about going to the store to see newest Duncan yoyo that was just released.
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.