After The Show May 9, 2014

With no fresh news to propel it, gold is trading quietly lower today as we head into the weekend.

All we got out of Tsar Putin was more posturing militarily. The absurd parade that shows off Russia's military hardware every year was particularly grotesque this go round given the tense situation in Ukraine.  

Only repressive governments feel the need to over-awe their people with such showboating.  

On top of that, Putin's visit to Crimea was a further thumb in the eye to Ukrainians. Many other countries make plenty of mistakes internationally, but usually they do it unthinkingly. Russia seems proud of itself for being a bully. But we all know what eventually happens to bullies.

U.S. dollar strength, which comes on the back of  a weakening euro, is at the heart of today's gold decline. In so-called regular trading, gold was up around $6. With dollar strength thrown into the mix, gold fell about a dollar. (As of 4PM in NY.)

MSN Money had this take on it:

"Lower-rated euro zone bonds rallied after ECB President Mario Draghi gave his clearest signal yet that policymakers might act in June to stem slowing inflation and bolster a fragile economic recovery in the single currency bloc.

"Italian, Spanish and Irish borrowing costs fell to record lows after the ECB raised the prospect that it could embark on an asset purchase program if inflation remained persistently low.

"Spain and Italy, which two years ago were at the forefront of the euro zone debt crisis, badly need the recovery to gain traction to curb high debt levels."

The U.S. 10-year bond was up a few tenths of a percent on the yield. Germany's was down.

Crude also fell for the first time in a while, still hovering around the psychological $100 per bbl level.

We are generally gold bulls, and it should be noted that now with China joining the crowd, all the major world economies - U.S., Europe, Japan and China - all are struggling with low, or non-existent, inflation. Disinflation is a worry. More stimulus is needed, plain and simple.  

As always, wishing you good trading,