Musclebound

It's amusing to ponder that only last year the heads of state of China and Russia were calling for another entity to replace the dollar as the world's reserve currency. Well, someone ought to let both the Chinese and the Russians in on the new joke. The dollar is looking like the world champ again.

At 4:30 PM EDT, the dollar is up 1.15%. That rise took all the steam out of very positive "regular" trading in gold, silver and platinum. Only palladium among the precious metals complex has had the strength today to move up in the face of the unfriendly dollar headwinds.

On another front that affects gold, equities markets today took enough of a hit to help gold and silver in the regular trading category. There are structural reasons for this - the general unease with price levels of stock, for instance - but the real driver today is a very predictable monthly pullback ahead of the release of the U.S. Labor Department's jobs report on Friday.

Through the recession, analysts and investor became conditioned to volatility in that data and now, even though employment has improved slowly but steadily, those folks on the Street are wary. But look for a good, if not stellar, report. The American economy is cranking.

Exports set a record and the index of the service sector is running neck and neck with the breakaway manufacturing sector. Last winter's Big Freeze is seeming more like a blip on the radar with every passing day.

Adding to dollar strength was an announcement by the European Central Bank that it will again purchase soft assets, mimicking the U.S. Federal Reserve's actions, which are now winding down. This is welcome news in general economic terms. They are also lowering interest rates. Those actions may not be so good for gold and silver, at least in the short term.

Once again, international tensions in the Middle East and Ukraine have had only a small effect on precious metals prices. One radical terrorist group in Syria is now eyeball to eyeball with Israel on the Golan Heights. Word is they're itching to start something with Israel.

A phrase that comes to mind? Good luck, Chuck.

As always, wishing you good trading,