A Few Simple Factors At Work

Some influences are temporal.

The possibility that the Fed may raise rates sooner than later will evaporate once the side-talk by members like James Bullard simmer down. His comments, for the august body of bankers and economists anyway, were intemperate. Rates can't be raised through press releases and speeches. But, his comments give us hope that inflation may be around the corner.

Stocks seemed to rein in their wild horses' running today as everyone begins to reconnoiter as to whether the equities are overpriced. The reality is that some are and a large handful are not - yet.

"Most valuation metrics suggest that equities are no longer cheap, though they're not exactly overpriced where they are now," said David Carter, chief investment officer at Lenox Wealth Advisors in New York. "People are looking for reasons to really buy, but we're optimistic that equities can continue to push higher." (From MSN Money)

There is a sense not so much that equities have gone too far, but have gone too far too fast. Thus the slowdown. That ends up a positive for gold because money that might have been invested in equities will go into precious metals.

Speaking of which, palladium became the leader in the precious metals complex, a spot usually claimed by gold. A strike in South Africa that seems beyond negotiation is the root cause, although South Africa's continued economic and social struggles also have pushed the coveted metal to a 13-year hight.

One thing that we need to take into consideration? The VIX on the CBOE is holding at its lowest levels since 2007. That bodes well for equities, which now will require a slow and steady investment stream. Not so much for gold and silver.

Here's a shocking statistic before we sign off for today.

There are 4.5 MILLION job openings right now in the United States. Yet we have an unemployment rate of 6.3%. What's wrong with this picture? 

As always, wishing you good trading,