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Precious metals sold off sharply on Friday on the back of news that OPEC would not lower current production quotas for their member nations. Gold, silver and platinum traded on higher than expected post-holiday volume as the dramatic fall in prices caught many by surprise. Investors of all sizes continue to exit individual commodity positions and commodity funds where there is talk that several funds could be closed before year end if the pace of redemptions does not subside. With all of the negative headlines, our corner of the financial landscape continues to shine as physical demand remains brisk globally.
Trading resumed yesterday with heavy losses again seen as crude oil prices continued falling to fresh 5-year lows and the resounding defeat of the Swiss Gold Referendum likely brought speculative sellers to the market. Silver continues to lead the charge lower as the overnight low of $14.17 brought us to levels last seen in the fall of 2010. At the lows, the closely watched gold silver ratio traded above 80 which was the level that several “experts” had called for months ago and just as many thought was a level that would signal a low for the price of silver. Keep in close contact with our trading desk throughout the week as demand is likely to remain very strong which could result in premium changes and delayed shipping in several products.
On a personal note I would like to say “thank you” for all of the emails and text messages wishing me a speedy recovery from back surgery. I look forward to speaking to you next week when I resume trading a few hours per day.
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.