Gold And Equities Hit End Of Quarter

We are faced today with end of month/end of quarter maneuvering. Investors usually rebalance their portfolios at the end of a month, and do even more juggling at the end of a quarter, which was certainly the case for equities.

Gold was a bit more complicated but both sectors revealed their vulnerabilities to the stronger dollar, which has appreciated 9% thus far this year. It was up again today.

The bright side for equities is that April, and particularly the second half of the month, is the best month for stocks over the last 55 years.

Gold was actually higher in regular trading but could not resist today’s stronger greenback. On the regular trading side the yellow precious metal benefited from the stock slide worldwide. That gave it some haven strength.

Gold is also under pressure from analyst-investors who believe a rate increase by the Fed is likely sooner rather than later.

Crude oil, both West Texas Intermediate and Brent North Sea, were down – the former off 2.5% while the latter was down 2.25%. As the “framework for a deal” with Iran draws closer, oil is looking to the downside.

On top of the normal end of quarter/end of month strategies, we are also faced with a short trading week. Many traders will be off for Good Friday and trading in almost everything will be subdued from now until next Monday.

Beyond the stress created by the strong dollar, gold is facing a relatively quiet international news trough as well as low physical demand.

There was some Fed speak this morning coming from a conference moderated by Cleveland Fed President Loretta Mester that was hosted by the Federal Reserve Bank of Atlanta. The usual suspects showed up and, while they debated somewhat, no new territory was staked out. The doves were dovish and the hawks were hawkish.

Interestingly, Ben Bernanke launched a blog today under the auspices of the Brookings Institution and he was staunchly dovish in his commentary and observations.

Wishing you as always, good trading,