Uphill Battle

Gold fought an uphill battle against the equities today.

This was in spite of the fact that the earnings season now upon us has been lackluster with the occasional shining star popping up. Overall earning are improving but the average is being dragged higher by those sparklers. Many speculators are believing that the rest of the listings will come along in time and so are bidding up the prices.

Our sense is that there is going to be a long-lasting correction that will be significant, though not a shocker. But some people will lose big. Keep an eye on short stock contracts for an indication of what will happen.

The dollar's strength helped push gold down, accounting for about a third of the price decline.

"All the fundamentals still line up that stock prices can go higher," John Fox, director of research at Fenimore Asset Management in Cobleskill, New York, said. "The few earnings that we've had so far have been coming in pretty well."  

Silver fared worse as did many other commodities. All ag commodities were down today except sugar, which often operates independently.  

Crude oil was down marginally, while the three benchmark bonds from the world's leading free economies - the U.S., Japan and Germany - were up a small increment.  

Turning briefly to the crisis in Ukraine, Frances Hudson, a strategist at Standard Life in Edinburgh, which oversees $294 billion said, "I see demand for gold remaining non-enthusiastic. Things are looking better in the U.S. and Europe. It's not that both these economies are racing ahead, but they are gradually improving."

Gold is looking for a driver. Right now, it's all dressed up with nowhere to go fundamentally.

As always, wishing you good trading,