Gold and Other Investments Silent

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What is there to say when equities are struggling to find direction, oil is down, the U.S. dollar is flat, U.S. Treasury yields are down on the 10-year, and it’s Friday?

The simplest thing to say is that investors, analysts and traders don’t know what’s going on in the economic and business world and have pulled off for a pit stop for a tire change and refueling. Heading into a weekend seems the ideal time.

In a piece of unfortunate timing, Chairwoman Janet Yellen of the Federal Reserve is slated to speak in San Francisco beginning just 15 minutes before the closing bell on Wall Street.

It could make for a volatile close, or a crazy opening on Monday, if she says something out of line with comments and the news release from March’s FOMC meeting.

We think the chances of Yellen doing so are slim to none. Every single thing has been said by the Fed, directly and indirectly, but anytime it is said again, it tends to cause some sort of reaction.

We feel there are other issues bothering equities, although it is hard to ascertain how those might affect gold in the near term.

U.S. consumer sentiment fell month-over-month in March, a survey showed that was released today, though the decline was smaller than forecast.

The final reading on U.S. GDP for Q4 of 2014 was unchanged from the previous forecast indicating a 2.2 percent rate of expansion. After-tax corporate profits fell at a 1.6% rate in the fourth quarter. The last statistic can be blamed squarely on the rising dollar.

Very soon we will be hearing a lot of squawking and wailing from Wall Street on the threat higher interest rates would pose. That will get even the attention of Fed hawks.

Like the old retail days on the streets of big cities, there was such a thing as “Lookers Days,” when everyone was looking and no one buying. That’s our day, regardless of the kind of investment on the market.

UPDATE: Chairwoman Yellen has said the Fed may very well raise rates later this year.

“With continued improvement in economic conditions, an increase in the target range for that rate may well be warranted later this year,” she stated in prepared remarks at a monetary policy conference at the Federal Reserve Bank of San Francisco.

She also said, “The actual path of policy will evolve as economic conditions evolve, and policy tightening could speed up, slow down, pause, or even reverse course depending on actual and expected developments in real activity and inflation.”

Wishing you as always, good trading,

Gary S. Wagner - Executive Producer