There Is No Telling

Some haven demand today pushed gold higher along with a quietly softer U.S. dollar. In Europe, Ukraine and the terrorists in Iraq and Syria weighed a bit on equities sentiment. We wouldn’t call it a tidal wave but there are some concerns about the world economy, with China leading the worry party.

Europe is a party to all this, too. China-Europe trade has been falling and it has now reached a tipping point. Quietly, both Europe and the U.S. have recovered their manufacturing mojos and this is starting to hurt China’s largest economic sector.

Europe also felt some negativity from the shaky situation in Greece and all the talk of war in the Ukraine has got everyone jittery.

A slightly different tune is being sung by Citi, which said today through analyst David Wilson, “For the three months up to the FOMC meeting gold has behaved as a safe haven because of Greece, but now the focus has shifted back to the U.S. and the timing of the U.S. interest rates hike.”

That’s a nuance, but the focus on – as opposed to the reality of – an FOMC rate rise is premature. Regardless, the driving forces in today’s markets say the contrary. Europe and its various entanglements are very much on people’s minds.

Crude oil ended up higher for the third session in a row. That’s another outside market that helped gold.

OPEC said there would be greater demand for crude this year than their analysts previously projected and less supply from non-OPEC countries.

The fact that the U.S. oil rig count last week fell to a three-year low also bolstered prices, which are attempting to find a new floor after a brutal selloff in crude that demolished over half of the commodity’s value since June.

U.S. stock exchanges were all down, indeed, but they seem to have stabilized in late afternoon trading. A bit of the sheen is off the rally prompted by the glowing jobs report Friday. Naturally there was some profit taking.

Almost without warning, (at least to those of us outside the market), the U.S. 10-year treasury is knocking on the door of a 2.00% yield.

Wishing you as always, good trading,