No Particular Place To Go

The equities steamroller just keeps flattening everything in sight. Of the nine exchanges across the globe, only the Nikkei in Tokyo showed any softness. That was on the weight of a drop in industrial output in the world's second-largest capitalist society.

Absent other news to bolster it, gold fell again today, as did silver.

The comments by Fed head Yellen after the FOMC meeting supposedly has investors shying away from gold as a store of value or a haven, as the chairwoman's news-conference responses seemed to indicate that a rise in interest rates is imminent.

"The rally in the equity market is keeping prices under pressure," said George Gero, a vice president and precious-metal strategist in New York at RBC Capital Markets. "The market players have been nervous ever since the Fed spoke about higher interest rates."

Interestingly, we aren't see a rush to short gold. Rather the money is just moving to equities, some private investments that aren't quantified for our eyes, or real estate holdings in small partnerships and in trusts. In case you haven't been watching, the average price of a Manhattan condo/co-op just hit $1.78 million. Now there are quite a few $10 million apartments in the city, but even once the high and low outliers are lopped off, the average price has still jumped to almost $1.5 mill.

But there are some optimistic assessments out there for gold... in the long run.

"The equity market expansion is purely a function of monetary policy," said Aaron Smith, Pecora Capital's managing director and one of its co-founders. "Growth is not inspiring, valuations are lofty. When there's a stop or contraction to the Fed's balance sheet, then you're going to see more than a correction in equities. There'll be a knee-jerk reaction where very temporarily gold prices will drop and then they'll outperform."

The extremes at which predictions are coming in - from those who say gold is going under $1000 ranging to those who say it will head back to a new high around $2000 and ounce - is intriguing.

What it tells us is that there is a lot of wishing for a stupendous economy, but great fear about a failing economy.

As always, wishing you good trading,