Gold Falls Marginally As Markets Stay Flat

Gold is down in afternoon trading by about 0.20%. Silver is much weaker, down over 2.00, on lack of industrial demand.

Flat as a pancake? Flat as a board? Flat as… markets at the end of August.

The only market that is showing much movement today is crude oil. U.S. producers added ten rigs back into the line, a hint at what might happen should oil head into the mid-$50s per barrel. That number of U.S rigs would jump like an Olympic athlete.

China is refining and exporting enormous amounts of diesel and gasoline, showing a rise of 182% for the former and 145% on the latter, July ’16 over July ’15. This is how we spell glut.

"Oil prices will likely experience another short-term dip in the coming weeks," Barclay’s Bank said, while Morgan Stanley said that, "Positioning data seems to confirm our view that the latest oil bounce is more technical and positioning-oriented than fundamental. In fact, new buyers have been mostly absent the past few months."

Unless there is some sort of great friendly epiphany between Saudi Arabia and Iran when OPEC meets in September, oil prices will continue to shuttle in the range they have been stuck in, namely $37 to $50. Nothing fundamental will move them either way unless calamity hits.

Over on the equities side, we are literally in the midst of one of the half dozen lightest days of the year. The New York Stock Exchange is projecting that about 700 million shares will exchange hands. August is usually slim but we’re close to recent records. A typical day on the NYSE runs about 1.0 to 1.2 billion shares.

Barely up or barely down, we’ll call action today on the three major indexes unchanged. Oddly enough, Europe was off as well across the board but by bigger percentages. The DAX was down nearly half a percent.

Oil weighed on both continents. Tech, especially bio-tech, seems to have buoyed New York prices back to even.

The U.S. dollar was up by a whisker against the euro and yen but rose 0.40 against the British pound. It could be that the UK, now in a bit of a bind regarding rates, is nervous about bullish talk among U.S. Federal Reserve officials. We still feel that serious rate hike talk is still off on the horizon.

Regardless, Janet Yellen will give a speech at the yearly Jackson Hole conference of central bankers on Friday and the content of that speech will be scrutinized carefully. The speech will color much of the rest of the week’s trading in all markets.

Wishing you as always, good trading,