Dollar Weakens, Ukraine Freakin'

The euro turned bullish today and that drove the U.S. dollar down, thus pushing gold prices up.
The tensions in Ukraine between, on one level the eastern and western parts of the country, and on the other between Russia and the West, are rising.

German economic sentiment index rose by 15.1 to a four-month high of 11.5 this month over October's reading of -3.6.

Most analysts had expected the index to improve by 4.5 points to 0.9 in November.

In addition, the index of the full euro zone's sentiment increased to 11.0 in October, up from 4.1 in September, well above expectations of 4.3. The unexpected rises gave the euro the shot in the arm it was looking for.

In the U.S., meanwhile, inflation seems to be warming up, though scarcely can it be considered as heated. Drops in fuel prices, stagnation in durables and the usual inflationary questions about food prices are keeping the rate just below where the Fed said it wants inflation to be.

On to the Ukrainian crisis... Why Vlad Putin wants a war with Ukraine is anyone's guess. We imagine he's thinking nationalism trumps economics. Without citing at least three or four dozen historical examples to back our thinking up, suffice it to say that nationalism does not trump economic interest. In fact, economics is a huge part of national success.

The Ukrainians are not backing down from the bully, either. It seems there was, for a while back in September, a chance that Ukrainians were willing to let Crimea go and Russia was willing to keep out of the issues concerning "Russian" areas of Ukraine. Of course, that's now fallen apart.

And here we are on the brink of a nasty land war in Russia/Ukraine. And, if the Russians think they are immune from attack, they haven't been paying attention to the upgrades to the Ukrainian forces courtesy of NATO.

Regardless of other causes and consequences, we know that the turmoil is helping gold prices rise. And that's just in time for Russia's big gold-buying spree. Russia had better buy gold. Their currency is becoming less useful by the day.

Yet another worry for Vlad is the continuing decline in energy prices. Today, in spite of a weaker dollar, WTI crude is down 1.80%, Brent is down over 1% and natural gas is down almost 2%.

Bond yields are flat. All risk-on plays went to the euro and, to some extent, gold. Oh, and that other investment type...

Are the equities markets plowing ahead? Yes they are. So risk money is continuing to be pushed into stocks and records are being broken almost daily.

EDITOR'S NOTE: Please be aware of this month's travel and holiday schedule, which will
run through November 30th. Thanksgiving falls within those days. Additionally, during that period, I will be in Indonesia, lecturing to key gold traders there. The time differential will make it necessary for me to send out the regular fundamentals (upper portion) of the newsletter at the usual time. The videos' timing may be different. You will receive special notification immediately following the release of a new video, which will appear on the website. Of course, trade alerts will not not change. I will monitor markets as usual and have all equipment necessary to produce videos. Thank you.

Wishing you as always, good trading,