Yesterday we closed the fundamentals portion of our email by discussing how many votes would have to swing in order to change the Fed's direction on QE3. Apparently many precious metals analysts can't figure simple math. Perhaps they are into advanced trig and algebra that mere mortals cannot comprehend. The fact remains: the economy is sputtering. employment is stumbling and bumbling and inflation is a cream puff.
Granted, more than half the drop in gold was due to a rise in the dollar but that rise is based on the... Read more
Just to be clear, a bear has lots of fur, claws, big teeth and is - well - bearish. A bull has horns, powerful shoulders and delivers a heck of a kick.
So, what today could possibly be interpreted bearishly in the FOMC after-statement? "There is not as much downside to the economy," seems to be the answer. If there were more downside, we'd be sliding into a new round of recessionary pressure. We're mired, stuck, slow, feet stuck in the mud. But we 're not headed toward a recession. we're looking at plodding, slow... Read more
The rising dollar is accounting for 2/3rds of the drop in gold today. Why the dollar has risen in the teeth of bad economic news is always a conundrum, but it seems that the equities like weaker retail sales because it could portend deeper cost cutting by corporations.
Then there are the last straggling Doubting Thomases who believe the Fed will drop acid and begin tapering this week. What are the odds on that? We'd like to think that the remaining decline in gold today is simply due to profit taking... Read more
Today gold probed the 1360s range and fell back. Some might attribute this to technical factors, which in retrospect tomorrow we may see is so. But the fundamental reason is that there is still the tiny fraction of people who are thinking that the imminent FOMC meeting could yield surprises that could be bad for gold.
Like taste, it is hard to dispute silly investment notions. But, really... unless the Fed is perverse, we'll see a luke-warm to very warm endorsement of their policies with, naturally, a couple of dissenters. So be it. Earlier, gold had climbed to near a 10-week high before... Read more