Daily Market Report

Election Results Soften Dollar

The Blue wave hit the shore yesterday and reached the House, but didn’t go far enough inland to reach the Senate.

The Democrats now control the House of Representatives and vow to disrupt the President’s economic agenda.

Equity markets seem not to care as many investors see the same congressional gridlock that occurred when both houses were under Republican control.

So at this point, corporate earnings are now front and center on investors’ minds.

Due to the midterm elections, the two-day Federal Reserve meetings begin today. No change in the Fed Rate is expected in the November meeting, but investors and traders will be listening to hear if there are any changes in 2019 rate hike predictions.

The Election results have weakened the U.S. Dollar a bit overnight. Additionally, Treasury yields are on the decline, S&P futures and global stock prices are higher, and emerging market and world currencies are also higher today.

The lower U.S. Dollar helping the price of Gold head higher this morning, now at a two week low, and the price of Gold is now trading in the higher end of the most recent trading range. Currently it is difficult to find a catalyst that would propel the spot price of Gold to the next major level of resistance at $ the $1,239 – $1,240 area.

So we look for a lower US Dollar and weaker Equity prices for assistance, but at this juncture at the opening of the Equity markets we see strong gains there, so it should limit our chances for higher Gold prices today.

Let me add this thought. In the near term, if the Democrats are successful in derailing the President’s economic agenda, I expect the Dollar to weaken and the price of Gold to benefit from such actions. That keeps my strategy of using a dollar cost averaging approach to entering the Physical Precious Metals market intact. And a way of creating true balanced portfolio.

Have a wonderful Wednesday.

Investing in Precious Metals

Many Investment advisors recommend precious metals as part of a properly diversified portfolio to provide capital appreciation, liquidity, and a hedge against conventional paper assets. Because precious metals are counter-cyclical to paper assets, a diversification into gold, silver, and platinum can therefore reduce the total risk of your overall portfolio and preserve your wealth. History supports the premise that investment in precious metals is the best protection against uncertainties in the future.

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