A Wild Horse

Although there were gold buyers a-plenty today, they were fighting an uphill battle against an implacable, rampaging foe. The dollar has become an untamable wild horse, rampaging here and there without effective resistance.

The trot turned into a full-scale gallop after the Japanese announced their form of quantitative easing only two weeks ago. For a while, the yen had been serving as a junior reserve currency in its stable, slow but steady growth homeland.

Nevertheless, the bargain hunters and fast-turnaround traders made a buck today even with the soaring dollar. (In late afternoon gold is up only 70 cents.)

The dollar's strength has another path to weigh on gold prices - any dollar denominated commodity is going to feel pressure when the dollar rises. This has kept gold sliding. The trading is best for those with dollar accounts. The rest have a cold drink and watch from the sidelines. Or, they head for the equities, which many are doing, as we know.

Risk off is the dominant trend. It's inescapable right now.

There was another overtone to the precious metals today. Tomorrow, Friday, the Labor Department will issue its October employment report. This put trading into a subdued mode, not that anyone is expecting any drastic surprises. As we noted yesterday, private job watcher ADP said 230,000 new jobs were created in October.

"We're holding steady today but nobody wants to make a big move ahead of the employment numbers tomorrow morning. If there's a positive number, they (the bears) may take a run at it," said Paul Sacks, principal gold trader at New York's Aurum Options Strategies.

EDITOR'S NOTE: Please be aware of this month's travel and holiday schedule, which will cover the period from the 13th through the 30th. Thanksgiving falls within those days. Additionally, during that period, I will be in Indonesia, lecturing to key gold traders there. The time differential will make it necessary for me to send out the regular fundamentals (upper portion) of the newsletter on a regular basis and trade alerts as called for. You will see charts periodically, but not daily. (I will have access to email.) Thank you.

Wishing you as always, good trading,