The main force driving gold prices today is a peripheral fundamental, namely the strength in the dollar. Dollar goes up, gold goes down.
There are a couple of reasons why this is happening and it really has little to do with the dollar but more with the euro, which is the currency relationship through which we view gold buying and selling activities.
The euro weakened today (as did the GB pound). Mario Draghi, president of the ECB - European Central Bank - is beginning to prepare the zone for a rate cut, a quantitative easing program, or both. When interest rates in a country or... Read more
On rumors that physical demand for gold would be resurgent in China and Iraq, prices rebounded a bit.
This happened in spite of the fact that there was a healthy jump in the value of the dollar, which took a few bucks off the price of gold.
There was also a good deal of bargain hunting on the exchanges with many traders getting and spreading the sense that the recent mini-bear has punched itself out and trends will return to the first quarter of this year
That is all well and good, but there are a number of loose-cannon factors out on the battlefield that need to be considered... Read more
The equities steamroller just keeps flattening everything in sight. Of the nine exchanges across the globe, only the Nikkei in Tokyo showed any softness. That was on the weight of a drop in industrial output in the world's second-largest capitalist society.
Absent other news to bolster it, gold fell again today, as did silver.
The comments by Fed head Yellen after the FOMC meeting supposedly has investors shying away from gold as a store of value or a haven, as the chairwoman's news-conference responses seemed to indicate that a rise in interest rates is imminent.
"The rally in... Read more
Gold fell again today. This time it was after extremely dovish statements by Fed chairwoman Janet Yellen. It leaves us scratching our fundamental heads.
Gold seems to be getting beaten about the head and shoulders regardless of what the Fed says or does, and that provides a great mystery. Equities seem to prosper at least when the Fed tends toward dovishness, although they also seem to be doing quite well when the Fed is hawkish.
We think there is a hidden message in Yellen's comments today, which dwelled on unemployment. There is, she said, "considerable slack" in labor demand.... Read more