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The Journal Gazette

  • Walt and Alex Breitinger

Friday, June 14, 2019 1:17 pm

Column: Gold blasts to new highs

WALT and ALEX BREITINGER | Breitinger & Sons LLC

Smart money chased gold prices higher all week in “flight to quality” buying fueled by geopolitical fears, continuing ultra-low interest rates, the trade dispute with China and thoughts the United States will allow bigger and bigger deficits.

The escalation of tension in the Gulf region grasped the attention of both “gold bugs” and conservative investors looking for a safe-haven alternative to the equity markets that were on the decline. As a result, gold has run up nearly $90 per ounce during the last month.

Too late to plant

Millions of acres have gone unplanted as the dry weather so desperately needed by Midwest corn farmers never came. Though some farmers are switching to plant soybeans, many in the Eastern Corn Belt never turned a wheel in the field and could only watch their fertilizer waste away with hopes for sunshine.

Those who got planted were thrilled to see prices zoom ahead by another 25 cents per bushel this week, to $4.60 by Friday.

Our heart goes out to those who couldn’t plant.

Grills sit in the garage

The same factors that drove grain prices up pushed livestock prices lower. Few grills got fired up this week, so steaks, hot dogs and chops sat in the fridge, leaving demand and prices on the down trend.

June cattle were trading at $1.09 per pound, while June hogs traded at 79 cents per pound.

Oil sinks on huge supply

A whopping 2.2 million barrel increase in crude oil inventories depressed prices below $51 per barrel on Wednesday, near the lowest level for the year.

However, when the news struck of an attack on two tankers in the Gulf of Oman, Secretary of State Pompeo assigned the blame to Iran, causing prices to bounce briefly on increased fears of war.

Ultimately, sagging global demand and the huge supply in the U.S. stockpile overwhelmed buyers and sank prices toward the lows by week’s end, trading near $52.75 per barrel at midday Friday.

Walt and Alex Breitinger are commodity futures brokers in Valparaiso. They can be reached at (800) 411-3888 or www.indianafutures.com. This is not a solicitation of any order to buy or sell any market.