So what does this mean for monetary policy?

Look who's back.

Peter Hot, Global Train director of Tickle Medals.

Pete, We missed you.

Welcome back to the show.

Good to be here again, Daniella.

So let's start with how the markets are interpreting Powell's messages today.

And more importantly, how you are interpreting it right now is you talk.

Stocks are still up.

Gold is still down.

Well, I mean, I think Palin made it fairly clear that, at least at least in the immediate term, he's happy with the way the economy is moving.

He's happy with the the employment gains.

He's happy with household formation, and he thinks the economy is in a relatively strong place.

And if you take the Corona virus issue off the table, that would indicate that the Fed is probably gonna be standing pat on interest rates, probably until at least through the spring.

Look at it again early summer, but right now I think the Fed has basically made a statement that they are comfortable with where rates are and no immediate need to drop rates barring any development from potentially Corona virus, which he did bring up as a potential threat.

Okay, so you know that, said Pete, how do you think that will impact gold prices going forward now? 00:01:40.210 --> 00:02:5.420 Well, again, when you are difficult to say when you use the context of going forward, I think in the short term, I think gold is Is it difficult metal to call at these levels right now, I don't think the Fed is going to drop rates in the short term, but I do think that there could be other risks Thio to the Fed policy. 00:02:5.420 --> 00:02:7.010 And that would obviously be if the U. 00:02:7.010 --> 00:02:15.560 S stock market started Thio sell off significantly by significantly, I don't mean you know, three or 5% correction.

So right now gold is right in sort of a neutral area.

I'd like to see gold close over the 15 78 level and if we got that close, I think 1600 would be the next move.

On the downside, I'm looking for gold to hold the 15 50 level, but in the interim.

There's very little movement here in the gold market from the perspective of investor interest.

It's been trading in about a $20 range with very, very little volume from the retail investor side.

I'd like to see that pickup.

The upside to that comment is that retail investors are not selling into strength, which is something that they have been doing.

So they're willing to hold Pat and and sort of watch this market. 00:02:59.530 --> 00:03:3.160 So right now it's it's it's right in the middle. 00:03:3.160 --> 00:03:7.910 I mean, and again it's It's not a good thing when you ask an analyst which way's the gold market going to go? 00:03:7.910 --> 00:03:9.540 And he's going to say he doesn't know, right? 00:03:9.780 --> 00:03:11.610 Quite right now, I don't know.

I think it could tip either way at these levels are still leaning, that the market is constructive and will go higher, But I think it will take a catalyst to move it up through the the 15 75.

Let me ask you that this Pete, do you believe in the rally that we're seeing in U.

S.

Equities?

Or do you feel that it's just masking underlying problems in the U.

S.

Economy?

Do you believe the story?

The narrative here?

Well, I think there's a lot of liquidity in the market, and the Fed with the repos are are adding increased liquidity to the market.

It's really a matter of where do you want to deploy your capital?

I mean, interest rates globally are still at the relatively all time lows.

The 10 year bond in the U.

S.

Is yielding 1.6 right now.

So I mean, it's a matter of where this cash goes, and right now the U. 00:03:59.780 --> 00:04:1.380 S market is still the hot market. 00:04:1.380 --> 00:04:3.640 I mean, earnings have been relatively okay. 00:04:4.210 --> 00:04:11.700 First quarter GDP is looking to come in probably just north of 2% So everything is still sort of moving along.

If the question is, do you do, I think the market is overextended and could use a correction?

Yes, absolutely.

But again, it's a matter of where are you going to put your capital?

And the equity market is still.

I think he's got some legs, probably through spring on.

And then I would be a bit more concerned about the strength of the rally, especially coming into an election year.

I think there's going to be a number of issues that developed a lot of them cannot be identified yet between now and November, and I think that's going to have an impact on the equity market, at least from a correction perspective.

And I think that will end up being positive for the metals through the balance of the year.

One time.

Well, I'm neutral or gold.

However, outside of the gold space, let's get your thoughts on on the P. 00:04:59.990 --> 00:05:0.220 G. 00:05:0.220 --> 00:05:4.540 M's rhodium still on a tear here. 00:05:4.550 --> 00:05:9.090 How do you see the platinum, palladium and rhodium market again? 00:05:9.100 --> 00:05:9.670 A lot. 00:05:9.670 --> 00:05:18.180 There is going to depend in the short term on how quickly China can get their manufacturing base and rebound on restarted.

I mean, China has been the primary buyer of the PGM space for the past three years and rhodium as God large spreads on the wholesale basis.

But it is north of $10,000 depending on type of rhodium.

You're looking to sell on again if the Chinese, if this Corona virus continues to dampen the Chinese economy, I mean they're expecting zero GDP growth for China in the first quarter.

Because of this, this issue and if demand from the Chinese side at least sort of stops. 00:05:55.230 --> 00:06:2.340 For the time being, I think a two least rhodium and palladium may have seen an inn from high. 00:06:2.340 --> 00:06:7.680 I don't think this market is going to collapse, but I think it needs to consolidate at these levels for the next leg. 00:06:7.680 --> 00:06:8.230 Higher. 00:06:8.340 --> 00:06:15.150 I think platinum anywhere in sort of the 9 50 South of 9 59 50 range.

I think he's a good medium.

The longer term by I see it.

My target on platinum by year end is 1200 so I'm still constructive the P G M's.

But I think there's a pause in demand cycle right now because of what's going on in China.

You know, the only thing that's interesting about rhodium if you tracked back it's charts, Pete.

Every time it's hit its all time highs, it signaled the end of the bull market.

Well, okay, but then you have to look at sort of the the event where rhodium ran.

I think it was in 2006 ran up to $10,000. 00:06:50.380 --> 00:07:3.500 But if you look at that chart, it really is basically just, you know, almost a straight move up to 10,000 then a collapse back down to the $3500 range, you know, within a space of less than two weeks. 00:07:3.500 --> 00:07:25.050 So you know, I don't consider that a chart, but I do believe that if the economy's globally are impacted by China and they start to slow and there is evidence that the global economies are going too slow at least second half of this year that the demand on that will be seen in the PGM demand sector in the industrial sector.

And that's why I think you're not seeing silver reacting to the same level to be upside that you have seen with gold.

I mean gold.

Last time gold with At this level silver was a $22 an ounce.

It's indicating that the industrial site is sensing that there is a slowdown coming. 00:07:40.740 --> 00:08:0.890 So on that basis, if you say that rhodium spiked because we've had this accelerated growth and now it's going to sort of plateau, and if rhodium starts to come down, that would indicate car demand is coming down globally, and that would signal that the economy's globally are slowing, which would have an impact on the industrial demand and directly on the PGM. 00:08:1.740 --> 00:08:3.420 Good thoughts from you today, Peter. 00:08:3.430 --> 00:08:6.150 Appreciate you coming on and we'll see you soon. 00:08:6.830 --> 00:08:8.270 It's nice to be here again, Daniel. 00:08:8.280 --> 00:08:8.800 Take care. 00:08:8.810 --> 00:08:9.950 And thanks for watching. 00:08:9.950 --> 00:08:11.210 We will have much more for you.

So be sure to stay tuned to kick old news.

She'll find you, take some time.