Caution Starts Off Week

Summer is a time of doldrums, as we've noted since the inception of The Gold Forecast. One never knows when traders are going to lie back against the haystack with a blade of straw in their teeth and snooze away a day. Especially Fridays and Mondays, the days that the trading herd uses to extend its weekends.

What is quite heartening about gold, which has been hovering between 1312 and 1320 for the day, is that there was some impressive U.S. economic data released today. Sales of existing homes veritably leaped. Prognosticators were looking for a 2.2% increase month over month. Instead, we got a 4.9% jump. Moreover, the number of homes on the market increased dramatically. Both increases are signs of a strengthening housing market.

Additionally, a "flash" report by private company Markit shows that the manufacturing index for the U.S. increased to 57.5, expanding from 56.4 in the previous report. A number over 50 shows expansion. The higher the number, the better the reading.

Meanwhile, China reported that annual retail sales were on track to top 12% in growth this year. (Take the number with a grain of salt.) China's factory activity also expanded - creeping above the magical 50.0 index mark. Even if we give the data the childish-big-lie discount, still the Asian giant is growing.

What this means for precious metals bulls is that there has been some small, grinding headway today despite positive economic news from the world's two largest economies. Usually that kind of big-shiny-moon info pushes gold and silver prices down.

Meanwhile, tensions in Ukraine are being tamped down significantly by both sides. At least that's what the talking heads are saying. Let's see how the pledges to negotiate work themselves out.

Iraq is topmost in everyone's mind as far as disruptive externalities. Today, for the first time, the U.S. threatened actual military action. Again, we have to wait and see what will happen before we can gauge how it affects gold and silver.

As always, wishing you good trading,