Euro Continues To Slide

There is some hope for gold despite the dollar's strengthening against the euro.

"Regular" trading lifted gold by about 0.2% today, demonstrating that investors and traders are showing modest faith in the chief precious metal.

Unfortunately, the dollar's strength wiped all of that gain out and then some, pushing gold down at 4 o'clock in New York, so it stands off $1.30/$1.70.

No real news emerged from Ukraine today, although there is louder and louder talk on both sides. It is interesting that Russia has made virtually no response to the illegal referendum in Donetsk. But we wouldn't count on Putin and his henchmen to come to their senses anytime soon.

The week of nationwide voting in Ukraine is fast approaching and it would make "sense" if he were to wait for the outcome of those elections. Probably he will test either what would then be the lame-duck government or the new one as soon as it comes into office.

Regardless, Ukraine was not the mover of precious metals today. You probably saw that palladium and platinum were up but those were on supply issues and not strictly speculative action.

U.S. retail sales were reported as having slowed last month. That had only a minor effect on gold, though. The slowdown is really reflective of a pullback based on a reaction to the end-of-winter exuberance that subsided after the harsh weather.

Depending on when Easter falls - it was late in the month this year - April can otherwise be a slow retail sales period except for holiday spending, which centers largely around household items, food, dining and travel, the last also affecting fuel prices.

There is also a lag factor between spending and the short, sharp slowdown that occurred in the first quarter of the year. Look for May to be better.

The real action today was in oil, which jumped over 1.0%. Worries about supplies and increasing world demand as the global economy recovers (especially in the U.S. and Europe) drove the price via the jitters machine.

As always, wishing you good trading,