Goldilocks

The most that can be said for today's trading in gold is that it reacted proportionately to the news on July retail sales in the U.S. Not too strong, not too weak. Just right.

According to Reuters, so-called core retail sales, which strip out automobiles, gasoline, building materials and food services edged up 0.1 percent in July. These sales correspond most closely with the consumer spending component of gross domestic product.

May and June core retail sales were revised lower.

"People are just not parting with their hard-earned funds and that is a concern," said Joel Naroff, chief economist at Naroff Economic Advisors in Holland, Pennsylvania.

Of course, many among us might say to Mr. Naroff, "What hard-earned funds?" Wage growth has been horrendously stagnant. And, while millions of new jobs are being created, unemployment seems chronically stuck.

This all means that the Fed's go-slow approach to tapering QE3 and sitting on lower interest rates will continue. The state of the American economy is still fragile. However, that doesn't mean that more and better-paying jobs are in the offing. Low interest rates encourage speculation in equities without proper taxation and job-building incentives.

And this is perhaps a good time to revisit in our minds and hearts the problem of the absence of even a modest approach to fiscal policy. Until some sort of Big Idea comes out of the elected government, (and this holds true of Europe and Japan, as well), the world's largest economy will remain in second gear. We can survive that, but what a waste of a big, fast machine.

Some see the international scene as dying down somewhat. We see it at an important crossroads. What happens in Ukraine is of particularly important. What is going on with the "humanitarian aid" from Russia? We shall have to watch closely. Iraq is troublesome, too, but short of another large war involving Western powers - a low-odds possibility - it shouldn't be moving the haven-demand meter much.

Equities were up today across the globe, the U.S. and European markets feeding on the promise of continued low Fed interest rates.

Other than the small touchstones discussed today, we are trading in a range. Summer lethargy has fastened onto the market.

Not too high, not too low. Just right?

As always, wishing you good trading,