Twenty-Four Days into a New America

December 2, 2016 - 5:45pm

 by Gary Wagner

Years from now, historians will put into perspective the transitional changes that began a mere twenty-four days ago. They will have the luxury of hindsight, with knowledge of the outcome. They will be able to see the cause-and-effect pattern that resulted from the policies, which were implemented by an untested businessman, who rose to the most powerful position on earth.

They will know, with absolute certainty, the answer to the most important question Americans, as well as global citizens, face in 2017: whether or not America’s 45th president was an effective president who brought about positive changes for its citizens as well as the world at large.

They will know whether or not the massive responsibilities inherent in being a president will have tempered his ego, and softened his stance on many divisive policies he spoke about implementing during the campaign. They will know whether or not President-elect Donald Trump was able to use his, “Art of the Deal,” to result in positive changes for America and the rest of the world. They will have clarity to replace the absolute uncertainty that we all currently face.

That being said, over this last three weeks, we have begun to see this new presidency develop as he selects key members of his team and cabinet. These individuals will guide and implement the policies he will set forth once in office.

President-elect Trump ran on a platform of change; to shift power away from the special interest groups and lobbyists and have the government more responsive to its citizens. He promised to cut taxes, be more responsive to businesses and the regulations, and committed to a major infrastructure program. This is set to ramp up fiscal stimulus for the first time in many years.

It is these promises and campaign pledges which have created this short-term optimism; a honeymoon period that will end on January 21. Until then, traders and investors are channeling this optimism, which in turn has driven US equities to an all-time record high and the US dollar to strength not seen since 2003. This optimism is also putting extreme pressure on the precious metals markets, taking gold prices to a 10-month low, resulting in a loss of much of the yearly gains in the last three weeks.

If Donald Trump has difficulty succeeding with his promises, we could see safe haven investments such as gold not only find support near the recent lows, but also move into a unprecedented price increase not witnessed since 2008.  If President-elect Trump is able to convert his campaign promises into policies, we could see safe haven investments such as gold continue to trade under pressure for the better part of 2017.

Inasmuch as uncertainty is the underlying framework as this new America emerges, there is hope and optimism that has been missing from the American fabric for many years. Only time will tell whether or not this new optimism is warranted or simply a belief based upon the knowledge that the alternative outcome is unthinkable, with devastating repercussions in the United States and abroad.

Wishing you as always, good trading,

Gary S. Wagner - Executive Producer

Gold Forecast: Proper Action

We are currently flat with no active trades in either gold or silver.

Inasmuch as we have had stability and softening in the most recent price decline of precious metals, we still have no technical confirmation that a key reversal or pivot point is at hand.

Gold Market Forecast

Since November 8, we have seen tremendous pressure on the precious metals markets which resulted in gold prices moving to a 10-month low. At the same time this recent decline fall short of giving all of this year’s gains with gold prices remaining 10% above the lows seen at the beginning of this year.

Recent lows this week and last have culminated at a 61% retracement of the year’s price range.

That being said I still believe that this is a logical point to look for potential price bottom in both gold and silver, all that is left to see is a technical bounce and sustained rally off of these lows.

Trending Markets Forecast

The Dow Jones industrial average although softening towards the end of the week did in fact close at a new all-time historical high on a weekly basis. The caveat to this fact is that during this week we have seen a real softening of both the Standard & Poor’s 500 as well as NASDAQ index is running in the opposite direction of the Dow Jones industrial average. Whether this is signaling a potential top or simply a consolidation, a rest so to speak until it returns to go to yet a new record high is undetermined.

Crude oil gained over 13% this week as OPEC member nations were able to come to an agreement for the first time in eight years.

The US dollar which began an aggressive rally in October and then found a second gear to take the dollar index to a 13 year high saw some softening in headwinds this week. Just as in US equities the key question is whether or not we are looking at a potential key reversal or simply a consolidation period.