Gyrations

Gold found some upside impetus early in the day before falling. It bounced up to 1245 before settling down for a small loss during afternoon trading. Silver prices were hit by a round of profit-taking only a day after gold experienced the same impulse. The gray metal is off over 1%.

The muscular uptick in oil helped temper enthusiasm for gold. It also helped to trim losses on the equities exchanges. Lackluster retail sales also dragged down the Dow and S&P, although stocks were down globally as investors are trying to scope out exactly where the world economy is headed in 2015.

They’re not coming up with any definitive answers.

It’s no wonder. Everywhere mixed messages are being transmitted o the trading communities. China is slowing down in manufacturing, but exports soared. Inventory reduction? The U.S. is seeing solid employment gains but retail sales disappointed, falling almost 1% for December year-on-year. Japan remains stuck in the doldrums and Europe lacks vision and will, although Germany, and surprisingly Great Britain remain solid players, even if growth is a tad slow.

Yet the Japanese yen is being perceived as the safe haven of choice these days, hurting gold’s comeback.

Moreover, the World Bank on Tuesday lowered its global growth forecast for 2015 and 2016 citing disappointing economic prospects in the euro zone, Japan and some major emerging economies that offset the benefit of lower oil prices. The only BRIC country showing robust growth is India, but India has a long way up to go, so that’s no surprise.

We are liable to hear more calls from Europe to ease the sanctions on Russia over the Ukraine impasse. Of course, those calls may be buried under the avalanche of work that needs to be done on the continent concerning the latest terror threat. We still predict military action in Yemen. It’s gotten out of hand.

We are also unsure of oil’s stability. More softness will begin to pinch the equities in the U.S. even more, and soon may hurt employment. The oil patch and its associated industries provide a good chunk of jobs, almost all of which are well paid.

Wishing you as always, good trading,