Sometimes It's The Little Things

Sometimes It's The Little Things

Profit takers zoomed in and sold off gold today, which has at least come off it's lows in afternoon trading. Silver, however, has taken a real beating from investors. The gray metal is often the weak sister when the chips are down.

Sales of new U.S. homes rose 9.6 percent to a 468,000 annualized pace for January, exceeding the highest of high estimates of economists surveyed (by Bloomberg). That pace is the most since July of 2008.

The stellar housing data is all the markets needed to wring profits out of gold, which had reached 4-month highs yesterday. The housing data also helped push the Dow higher, no doubt siphoning some precious metals money off in the process.

The general thinking about the housing surge is that finally houses that were started last fall are now coming onto the market, having had their completion slowed by bad weather. Of course, you can't have housing sales if you don't have houses. Some analysts are worried, though, that there is a coming credit crunch as banks look more and more closely at prospective buyers, who, at this point in the recovery will tend to be the least credit worthy.

While the political/military precariousness of Ukraine seems far from stabilizing, one thing seems certain. If the country tips west, its bills will be covered. If it tips to Russia (whether by honest or nefarious means), its bills will be covered.

That eased bond worries and clipped gold's value as a safe haven. 

Gold is trading off about $13 at the moment, but a solid one-third of that is due to dollar strength. Someone should tell the Russians that they are helping devalue their currency by threatening Ukraine. And whose currency most benefits? Their old nemesis, the United States. 

Not that she will say much new, but traders and investors are glancing to Fed Chair Janet Yellen's appearance Thursday before the U.S. Senate Banking Committee. The speech was postponed two weeks ago due to terrible weather in D.C. What could she possibly say that would change market perceptions?