Volatile Blahs

Equities were up a small amount today amid cautious holiday trading, but the U.S. dollar continued its climb to supremacy, helping push gold lower. But the dollar doesn’t tell the whole story today for gold.

The chief outside market influence, crude oil, was down severely again, by around 2%. Gold was dragged down on that ride.

Thin trading also did not help gold, as a few major sales going into year’s end forced prices down. Investors are squaring up their books, taking their losses (or gains if the case might be), and exiting positions all over the place, except for equities, which, of course are much less volatile than commodities markets, trading, as they do, in factors rather than simple dollar gain and loss like stocks.

The news of Greek’s renewed shakiness wasn’t enough to goose gold upward. Most analysts, including us at the Gold Forecast, feel that Greece is a lost cause and it is already factored in to prices of various financial instruments. Greece may continue to harm the euro, which doesn’t seem to need any help with that currently. A sinking euro lowers gold prices in dollars.

Some support was seen in physical gold as we approach the Chinese Lunar New Year, a favorite time for buying in the huge country. Other than that, consumption of the actual metal is soft.

While technical support was threatened today, the decline in gold didn’t crash through our previously delineated levels - more on that in Market Forecast.

As might be expected at this time of year, international news is slow so there were no big new factors that might lend support to gold as a haven play. Wishing you as always, good trading,