What The Dollar Giveth

After some solid fundamental news for gold bulls early in the day, momentum flagged as cautiousness took over.

The dollar's weakness has almost cut in half the "real" trading move today that remained.

Upbeat news from China's economy, an upbeat housing report in the U.S. and a pre-report flash on manufacturing (but tempered by a rise in weekly unemployment claims), and a committed easing of tariffs on India's gold imports served as the springboard for prices to rise around $9.00 before being beaten back.

None of this really affects what the Fed might do at their next meeting - or in subsequent meetings during the rest of the year. We believe the course is set unless something outlandish occurs in the American economy, either to the good or the bad.

We also think that there is more trouble in China, specifically its housing market, than we are privy to.  News from that country is simply not to be trusted until some settlement point arrives and then can be viewed through a rearview mirror.

The equities markets continue to win, even if in small increments. All three U.S. markets were up today, led by NASDAQ. But certainly, in those immortal words, there is nothing like "irrational exuberance" in the markets. Every instrument from stocks to crude, from bonds to currency trading is experiencing uncertainty regarding what to do and where to go next. Gold and silver are no exceptions.

So we are let where we have been left for more than a week. Trading sideways, rangebound, bumping against resistance and support as the market hashes itself out.

As always, wishing you good trading,