Friday's Whims

My fellow traders

Our end-of-week take on gold is that everyone needed a breather. Look as hard as they might, traders and investors couldn't really find the inciting incident that would prop gold up for the weekend. (The longer term is something else again and is better dealt with in the Market Forecast technicals section below.)

The U.S. airstrikes in Iraq are actually being viewed as stabilizing in the region. Turkey, apparently, has been requesting the strikes through backdoor channels and, if you notice, thus far Iran hasn't uttered a peep.

Fighting resumed in Gaza, but something tells us that the combatants are punched out - for different reasons - the Palestinians militarily, the Israelis psychologically - but nevertheless, they are exhausted.

Ukraine is about as hot as it can get. The Soviets - oops, we mean the Federation - arrested Ukrainian officers for "war crimes," an absurdist pastime. The Ukraine is not at war with Russia and if any of the allegations have foundation, the accused should be handed over to the International Courts in The Hague immediately. 

More adolescent behavior from Putin, who, easily enough could have negotiated with the current Ukrainian government over reasonable safeguards for Russian ethnics. But that ship has sailed. 

On the economic data front, the 2nd Quarter in the U.S. saw a rebound in non-farm productivity to +2.5% from a -4.5% in Q1. The effect of such a figure is to convince money people that the Fed will raise interest rates sooner, rather than later. That powers up the dollar, which drives down the price of gold. The productivity data should have only a short-lived effect.

Keep in mind, the combined figures for the first two quarters mean that U.S. productivity is down for the year by 2.0%.

Also keep in mind that productivity will not rise endlessly, especially since wages and hiring are flat, flat, flat. This wage issue is an enormous threat to prosperity.

Our game right now for gold is one of patience. A long ride means you have to sit still and concentrate on the road ahead.

Wishing you as always good trading,