Gold & Other Investments Struggle To Find Direction

Many markets, gold and silver among them, sought direction before the holiday weekend, but found little ahead of the anticipated jobs report due out from the U.S. Labor Department tomorrow.

Gold and silver gained a push from the declining U.S. dollar but “regular trading” tugged them back down into negative territory. That regular trading was dented by modestly strong interest in equities. Precious metals’ function as a haven just was not strong enough to add to the gain brought on by the dollar.

West Texas Intermediate and Brent North Sea crude were both down significantly. The framework for a future deal between world powers and Iran was concluded concerning nuclear weaponry development. The negotiators will get down to the real nitty-gritty come June.

While unemployment data are eagerly awaited, much of the dollar’s loss today was based in European trading as the continent headed toward the Easter weekend. Profit takers who held positions in the U.S. dollar were out in force, as they were in the U.S.

In Europe, most markets will be closed Friday and Monday. The U.S. bond market will have a shortened day Friday while stock exchanges and precious metals floors will be closed until Monday morning.

Careful not to roil markets before the long weekend, instead Fed Chairwoman Janet Yellen focused remarks today on income inequality. We feel, because the Fed is somewhat limited in this arena, she is bailing out the ocean on this particularly intractable item.

However, every time she or previous Federal Reserve members tackle the issue we are reminded how Congress has no real impetus to get into the act and that is where the problem lies.

More people working and making better wages must help the economy. Because it would create inflationary pressure, that would also be good for gold as a hedge against inflation.

While her remarks seem tangential, they again signal her willingness to keep interest rates low, since right now that seems the only weapon deployed against a new retrenchment in the world’s largest economy.

Wishing you as always, good trading,