A Speck In The Eye

Like a gnat on a summer night, the situation in Ukraine flutters and darts around the periphery of the world's vision. Just when things seem to simmer down, the tension ratchets up again.

Germany has said they would send natural gas they hold in reserve to Ukraine in an emergency. Scandinavian countries are backing the Germans up and promising to feed Germany should the Russians get hot headed... or more hot headed.

Speaking of hot heads, a Ukrainian legislator said that his country could re-develop nuclear weapons in very short order. He also hinted, ever so slightly, that there is still fissionable material in the country. It is a short hop to make a dirty bomb.

Meanwhile, although certain critics of the Obama administration are wailing and gnashing their teeth, he is proceeding quite deliberately. No one sensible in the U.S. wants another war, or even militarily a big "supply-the-little-guy" imbroglio.

The situation in Europe, then, has helped keep gold floating higher. It's not had such a wonderful effect on silver, which is suffering from an industrial slowdown in China.

Silver is in the same boat as other industrial metals, reacting to China's slowdown. Non-ferrous metals took a steep dive today as can be seen on their special index from Dow Jones.

Oil fell below $100 per barrel for the first time in weeks, continuing its decoupled relationship with gold. The 10-year U.S. Treasury bond also fell, lingering around what has come to be seen as a "natural" level, 2.75% on the yield.

Speaking of oil... well, fuel in general... natural gas prices continue to founder. Energy producers are going wild asking the U.S. government to allow the cap on nat gas exports to be lifted. Perhaps gradually, but first, maybe we should, like Germany, beef up our own reservoirs so we don't experience shortages in the U.S. as we did during the pit of this past winter.

Even if we were to lift the cap, however, getting the liquified gas to our buddies in Europe is a heavy lift.  

As always, wishing you good trading,