Another Reversal

Unusually, gold took its cues from a powering-up U.S. economy. This at first seems counterintuitive.

On second glance, though, with other economies struggling, a fundamental inclination toward haven buying is in place. We should also be aware that, to many in Europe and Asia, the U.S. equities appear oversold. Thus, though not robust, there was more gain than loss in European and Asian stocks, but much of that buying was due to bargain hunting and opportunism as opposed to the New York exchanges, which are seeing "natural" bullishness.

Gold, too, felt the push of short covering, many feeling that yesterday's minor sell off was, even at its modest level, too much.

On the other side, due to the good news issuing from the American economy, the dollar rose and that nicked some of gold's strength today. The dollar seems to grow more powerful by the moment. We are wondering, though, if a correction in reaction to the rampant speculation is due soon. 

A note of warning on today's equities rise. There is a lot of book balancing as the year moves toward a close and some traders will dump one stock and buy another to show better performance on their ledgers. Also, many of the day's biggest movers on Wall Street were infrastructure related. The drumbeat for investment in that area has been growing. President Obama added his strong opinion to the drumming today.

As confounding as gold's noteworthy move today was, the split personality in oil is even more bewildering. WTI crude was up not quite 0.75%, but Brent was down about the same. The differential between the two prices on trade is narrowing. We may be looking at a new normal with oil, in general, but certainly on that price convergence. 

As if to underscore the point, the price of gasoline in Oklahoma City fell below $2.00 per gallon today. This is not the kind of Christmas gift Comrade Putin was looking for.