The Dollar. Repeat, The Dollar

Fundamentally, today's driving force in precious metals has been the rise of the dollar, which rocketed back from a few days of downward slippage.

Looking at a number of factors, this should not be surprising.

New homes sales soared and roared, showing the biggest one-month gain since 1992, and in the more recent era brought those sales to their highest since 2008. You remember 2008, don't you? Whether this kind of momentum in new housing is sustainable is another question altogether, especially with winter closing in on the northlands. A big question will be: how much inventory is available?

Another ongoing development affecting the dollar and therefore the price of gold and silver is the abrupt, sharp contraction in China, which now seems to be spreading to the Eurozone. (Although the European economies are not contracting sharply, they are having plenty of cramping. A decline in Chinese activity can only hurt the E.U. - and more than it would the U.S.)

In a surprise move based on lower inventories, crude oil jumped 1.5% on the day. Brent also rose dramatically. Oil was certainly uncoupled from gold on the day.

As one might expect on a day like today, equities were up strongly. The only index that hit the downside today was the NIkkei.

The S&P 500 found its strength today in healthcare, biotech and, as you would assume from the data above, from housing stocks. Investors also were buying on dips, something of a habit in the last few weeks.

As always, wishing you good trading,