Gold Rebounds Slightly On A Number OF Factors

We are happy to say we will not be talking about the Fed today. Soon enough, however.

Gold rose modestly on short covering and bargain hunting. Many traders felt they could buy and bid it up, which they did, although the bump has little steam in it.

The U.S. dollar courteously did not significantly interfere with the small rise, wobbling around as it did on the day.

Equities had a bad day and that contributed to the rise in gold. The Dow was off 100 points at one juncture. It has since come off those lows.

Travelers insurance, IBM and DuPont showed poorer-than-expected earnings. DuPont felt the heat of the higher dollar. IBM is seeing a longer-term decline in revenue and profits.

However, the NASDAQ was up largely on biotech plays. And, as many observers have pointed out, this bifurcation of equities markets is a healthy sign. People are buying stocks, not across-the-board markets. So, they’re interested in stocks, just very specific ones. Everyone expected a mixed earnings season for the first quarter and that is what we indeed are seeing.

Additionally, there are troubled waters off the coast of Yemen. The U.S. has sent more warships to the immediate area to warn Iran on too much interference in the civil war raging in Yemen. However, it is seen as muscle flexing.

“This is really about sending a message,” said an American official who declined to be identified while commenting on a continuing military operation. “It is a message to our partners that we are in this and willing to support. It is a message to the Iranians that we’re watching.”

“Our partners” would be primarily Saudi Arabia.

Proving once again that crude and gold have completely uncoupled for the moment, West Texas Intermediate fell by 2% today. The thinking behind it is that there is another build of stocks in the U.S. and Canada.

See – no talk about the Fed. What a relief.

Wishing you as always, good trading,