Metals, Bonds and Market Worries

05/05/2017 2:46 am EST

Focus: COMMODITIES

David Fabian

Managing Partner, FMD Capital Management

There’s just something about this market, it just can’t seem to make up its mind. One interesting observation that traders have been mumbling about is the action in the precious metals markets, observes David Fabian, money manager and editor of Flexible Growth & Income Report.

From a purely observational perspective, it does look interesting that we are starting to see a trend develop after a few years of underperformance.

While it’s on the downswing now, we are keeping an eye on a potential turn there. The two ETFs we watch in house are the SPDR Gold Shares (GLD) and the iShares Silver Trust (SLV).

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Bonds are another area of the market we always have our eye on and they are acting relatively stable for the moment. It will be interesting to see where rates head towards if we do start to experience more volatility in the equity markets.

If the status quo holds true, we could easily see much lower interest rates before our thesis on higher rates in the long-term comes to fruition. More volatility in equities could be just what the precious metals and bond markets are looking for to continue their recent trends.

Looking at the last several months of trading in the S&P 500, if we don’t break to new highs soon, the February high, alongside the most recent push higher last week could mark a double top.

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