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Recent Geopolitical Events and the Market - Market Report for 07/18/2014

Recent Geopolitical Events and the Market - Market Report for 07/18/2014
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Posted: 07-18-2014 11:40:00 AM

Yesterday’s events and the reactions of all markets have been well documented and highlight why investors flock to gold and precious metals during heightened geopolitical events.

Yesterday’s events and the reactions of all markets have been well documented and highlight why investors flock to gold and precious metals during heightened geopolitical events. The question is where do precious metals go from here? This morning finds precious metals are lower across the board as are European equities, while U.S. equities are higher and recovering from yesterday’s sharp sell-off. Geopolitical tensions are high globally and this will provide underlying support to precious metals for the foreseeable future but as we are witnessing this morning the spike higher is not followed by further gains and we eventually get a day like this past Monday when prices drop over 2 percent. This is followed by physical buyers stepping to the plate and taking advantage of the lower price.

I continue to look for a breakout of the current range in gold and expect a 5 percent plus move in gold from $1,300.00 before the end of August. Keep an eye on the 10-day moving average in gold at $1,317.25 and the 100-day average at $1,303.50 today as a close above or below should give us a hint on where gold heads next week. While I expect the market to break on the upside, that is likely the minority opinion. Overnight economic data released in China showed an economy that remains soft and continues to slow which should weigh on base metals.

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About The Author

Roy Friedman

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.

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