You Can't Argue With The Facts

Well, actually you can argue with facts, but in the case of economic data, they'll only call you a crazy fool.  

Data released yesterday, and thoroughly discussed in our email, pointed toward a slightly more positive U.S. recovery, with one very important rider. The Fed said that the March stats were better than expected and thus had a very optimistic outlook about the rest of this year. (January and February were abysmal, mostly due to bad weather.) Also ADP said job growth was significant in March and it is anticipated that the Labor Department's report will echo that when released on Friday.  

China's manufacturing is in a slow-growth phase, and, if our two-cents means anything, it is stumbling. The China index barely went up, and it was only slightly over the 50.0 mark. Anything over 50.00 denotes growth. So, China is essentially barely growing at 50.4 on the index.

While there is still a crisis in Ukraine, moreover, it seems that it is going to end not with a bang but a whimper. Unless either side does something rash. Perhaps Ukraine doesn't want to be saddled with the eastern part of the country. The question is whether many of the areas that have significant minorities or even majorities of Ukrainian ethnics will stand for the creeping annexation.

More troubling for the gold markets is the absence of any significant physical purchase momentum.  

ETFs are still wont to dump their bullion. China and Korea had very soft "Gold Week" purchases given the tragedies the two countries suffered recently with the Flight 370 disaster and with the sunken ferryboat full of school kids.

And India - which you may have noted - has been conspicuous by its absence in the gold-buying game. Long-awaited relaxation of the country's tariff on the shiny yellow metal has yet to materialize.

Although stocks were mixed around the world, the rally on Wall Street, in particular, is probably far from over. That is not good for gold. Crude oil is treading water just below $100, a harbinger that spring is nearing the halfway point and the traditional rise in prices the season brings may finally be faltering.

Because of the message from the Fed yesterday - not a whisper about interest rates - the bond yield on the 10-year continued softening.

Gold bulls also received no assist from the dollar today, which remained essentially unchanged for the day.

As always, wishing you good trading,