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As the market waits for the release this afternoon of the FED minutes from the last meeting we see all four metals in negative territory.
Also fueling the selloff are comments made yesterday by IMF Director Christine Lagarde. She said, “The world economy is continuing to RECOVER, but it’s still at a delicate stage. We have growth; we are not in a crisis. The not-so-good news is that the recovery remains too slow, too fragile, and risks to its durability are increasing.” She warned that because growth had been “too low for too long,” too many people were “simply not feeling it.”
Well, if I may be so bold to politely ask Ms. Lagarde to look out her window. On March 10th, the European Central Bank (ECB) cut rates, charging banks from 0.3 to 0.4 percent to hold cash overnight, putting Denmark, Sweden and Switzerland in negative territory. Migrants continue to come into Germany and other counties in droves putting enormous pressure on each counties economies. What will be the cost to support each family and how will these people find jobs?
German Chancellor Angela Merkel is in talks with Greek Prime Minster Alexis Tsipras about another Greek bailout. Seems to me this story has been around for a very long time. The German people are not happy with the way Merkel has been handling these negotiations. And the Greek people are still fighting any austerity measures presented to them.
So the picture I’m trying to paint is: Over the pond things are not as rosy as Ms. Lagarde and Ms. Merkel would have you believe.
So as Europe continues to struggle, the only thing stopping gold from a strong rally here is the interest rate games the Fed Governors are playing. I know I sound like a broken record (a saying we used many years ago when I was a kid) but my hope is that today, maybe we will get some news out of the last FED’s meeting that will show that a rate hike is not in the cards anytime soon. Wishful thinking on my part.
Author Name: Walter Pehowich
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