The health of the domestic and global economy continues to be a growing concern for investors of all sizes. Adding to this are mounting geo-political concerns in many regions which have most market participants looking for the exit sign on equities while they move into U.S. treasuries and precious metals.
A few weeks ago, all markets were poised and pricing in a U.S. interest rate hike every quarter for 2016. In recent days, it now appears that any hikes are likely to occur no sooner than the second half of the year with many “experts” already calling for a single hike in Q4 or none at all for 2016. As sentiment has changed, investors have been purchasing U.S. treasuries which has pushed the yield all the way down to 1.75 percent which has further supported gold and company. Gold touched $1,200.00 yesterday as heavy, broad based buying continues to drive the market to levels not seen since June of last year. You have to look no further than YTD results in order to see why gold and company should be a part of every well balanced, diversified portfolio.
So far this year, the Dow Jones Industrial Average has fallen almost 10 percent while gold and silver have gained over 12 and 10 percent respectively. In the short term, gold may struggle a bit at $1,200.00 as producers do some hedging while speculators lock in profits but the landscape is changing for our market and I expect dips to be well supported by physical buyers with a longer term perspective on investing along with traders who will rotate into precious metals from a technical basis.
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