Ahead Of The Curve?

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Gold saw a bit of recovery today. about half of it from dollar weakness, half from regular trading. For the moment the bleeding is stanched.

This week is going to see some key economic data released and the waiting game has begun.

U.S. employment gains - and there will be gains - are the key stat everyone will be looking at. If they are softer than predicted, gold may see a bounce.

But that will also hinge on what happens at the meeting of the European Central Bank on Thursday. The ECB is again looking at near deflationary price issues and, like the U.S. and other developed economies, the EU wants to see something around 2% inflation per year. Right now Europe is running at less than 1% inflation and that's not a sign of a robust economy.

At the moment, there are no geopolitical externalities that are affecting gold. The Russia-Ukraine contretemps is subdued as Russia continues to digest the bad news about Crimea's economy and begins to figure out the tab for reuniting the economically weak region with a fairly anemic "mother economy."

The South China Sea controversy seems to have cooled down for the moment, but at any minute it could turn into a raging fire. If you ask us, the lynchpin is Vietnam. We believe that they will fight to the last person. Also, we believe that China is afraid of Japan - boht on its own and with its heavyweight allies, including the U.S.

Equities in New York and Europe took a breather today from what has been seeming like an unstoppable rise. We still believe there is a lot of air in the tires of the stock market and some will have to be let out.

CNBC discusses today whether the world's energy bill will be hitting $48 trillion this year, a level never seen before. If this is so, you would think that some geniuses and a bunch of money backers would figure out a way to wrench maybe 10% of that into their pockets using renewables. After all, who couldn't use a spare $4.8 trillion per year?

As always, wishing you good trading,