Good News Hurts
There was far too much good news in the U.S. today for gold.
There was too much renewed risk appetite in the equities markets.
There is a rumor China wants to run the gold markets.
Europe suddenly looks like a political basket case. Will the center hold?
Ukraine, despite the central government's robust attack on separatists, has not provoked Russian ire.
The Conference Board reported its consumer confidence index as having risen to 83.0 this month from 81.7 in April, which was in line with market expectations.
The Standard & Poor's/Case-Shiller house-price index rose 12.4% in March from a year earlier, beating forecasts for a gain of 11.8% and following a rise of 12.9% in February. so, if you had a house worth $300K a year ago, it's no worth $336K (roughly), although it will be interesting to see the granular aspects of where prices have rebounded most. Twelve percent is an awful lot in highly developed, wealthy urban markets. But most of that growth is in ultra-high-luxury sales. ($10 million and above.)
However, one of the problems housing prices will face soon is that stagnant wages and only modest employment growth will keep a damper on the prices of the great bulk of houses that will be moved to market in the next 18 months.
Perhaps most powerful of all the stats that came out today is a seemingly ever-improving wholesale pricing trend.
The Commerce Department reported U.S. durable goods orders rose 0.8% in April, blowing away expectations for a 0.5% fall, after a 3.6% increase in March, the figure for which was revised up from a previously estimated 2.9% gain.
As we have said before, when technical trends become so strong that they cannot be resisted, technicals essentially function as a fundamental force.
Read and see more in today's technicals section of the email, and of course, on our daily video.
As always, wishing you good trading,
Gary S. Wagner - Executive Producer