Twisting And Spinning

As the dollar and the euro continue to engage in a high-spirited dance, today saw the greenback fall dramatically. This was an indication that the Greek financial predicament “feels” solved. The euro’s rise was also indicative of newfound strength in Germany’s industrial sector. The weighted measure of Germany’ growth in that sector leaped to its highest since 2008.

The falling dollar prevented gold bulls from losing their shirts today. The buck’s softness has added about $12 to the price of the yellow precious metal. (It added 16 cents to the price of silver.) Regular trading, however, was pessimistic about gold.

The main reason for that is that analysts believe there is going to be a renewed vigor in the government’s U.S. labor numbers due out tomorrow. The private company ADP already checked in with its number – 213,000 jobs added – and while not as sparkling as much of 2014, the figure is still quite high.

Strong employment growth could be read as a reason for the Fed to raise rates. Never mind that he U.S. central bank has been saying mid-2015 for the rise for so long. The jobs number isn’t going o blow any of the Fed’s cherished beliefs away. Nevertheless, gold and silver took a beating from regular trading, independent of U.S. dollar strength.

Crude oil reversed field and jumped 6% (in mid afternoon), all but erasing yesterday’s steep loss. Crude is coming o resemble a wild football running back, changing directions, stopping, turning around then resuming its path. You have to pause to consider that oil hit its low just eight days ago, and while the March contract hasn’t gone down again as far as $43.58, it’s probed that bottom. And, sitting where it is as we write – 50.35 – we can still consider it to be searching to break out to the upside of its current range.

Oil’s Thursday recovery brought smiles to the faces of traders across U.S. stock exchanges. All three are up on the day in the neighborhood of 1%. The Dow was up also on news in the chemicals and pharma sectors. Quietly, the S&P 500 has come within range of its prior record-high close of 2090.

The optimism found among equities people now is a sign that there is a growing risk-on attritude. That certainly could affect the precious metals.

Wishing you as always, good trading,