Change Between Scenes

You go to a show - a musical, a play - and as the scene is changed, the stage goes dark but from your seat you can glimpse people scurrying around in the wings doing things to get ready for the next scene.

So it was over the weekend. One could sense there very well might be a change of scenes but wasn't sure how long the stage hands would take to move the props around.

The Ukraine situation is certainly taking top billing. The apparently completely bogus elections, something more befitting a backward country in the 19th century and not a reasonably modern one in the 21st, were held. The reports of violence on both sides, intimidation, ballot stuffing and screaming old women dominated this so-called voting in Donetsk.

Meanwhile, the EU turned the screws a half a notch on Russian, especially Crimean, companies.

There are many who think a "strong response" is called for by the West. However, they are not thinking the whole thing through. The EU and US are making Ukraine walk a tightrope every time the ratchet is clicked. Neither the EU nor the US wants a completely dependent Ukraine on its hands.

And the last thing anyone needs is for the extremist Russians to shut off the gas pipeline to Ukraine or the rest of Europe. Plans have to be laid. Strategy trumps impulsiveness every time.

Herein is a lesson - once again - for not doing business with dictatorships.

The action in Ukraine, of course, helped raise gold prices today. It incidentally helped silver, as well.

Possibly more crucial during the Ukrainian roller coaster ride, the momentum of the euro's weakening against the greenback ebbed a bit today, and, while it nicked gold and silver, it was just that - a small cut.

The impact of positive US economic news on the precious metals complex is also fading today. People are realizing that not much has changed, especially concerning the future of interest rates.

Finally, all major equities indices were up today except the Nikkei, the US markets in particular. Crude was also up as was the yield on the US 10-year bond.

This should tell us that in spite of events in Ukraine, there is a lot of money out there seeking investment in many areas: precious metals, oil, bonds, the dollar, and, of course, record-price stocks in the U.S.

As always, wishing you good trading,