Gold

Just as nature abhors a vacuum, investors abhor uncertainty. That is what is driving the market this week as we (still) await Fed chair Janet Yellen’s speech at the Jackson Hole Economic Policy Symposium.

For the record, here is a brief description of the symposium, taken from the website of the Federal Reserve Bank of Kansas City:

Fed Chairwoman Janet Yellen’s speech in front of important central bank executives from around the world is fast approaching. The long shadow of Friday’s address at Jackson Hole prompted gold investors to move off the sideline and, unfortunately, do some selling.

Two key releases of data are the true underlying fundamentals driving markets today. Certainly another little upward bump in the price of oil has helped stimulate U.S. equities, but it is the data that really counts.

Gold is down in afternoon trading by about 0.20%. Silver is much weaker, down over 2.00, on lack of industrial demand.

Flat as a pancake? Flat as a board? Flat as… markets at the end of August.

While we have to take seriously any statement from Federal Reserve regional bank presidents, not all comments are equal because not all Fed presidents are equal.

It’s best to start with U.S. dollar weakness today because it has affected most other markets. The greenback is down against the euro, yen, British pound and Swiss franc. The dollar is sliding because of a thousand small cuts to its strength rather than some large crisis of confidence.

It’s not unusual to get a bit of a whipsaw effect on the day of the release of minutes from the Federal Open Market Committee meeting. Many who were betting one way or another suddenly shift to the diametrically opposite positions. And then they possibly shift back as volatility increases and traders take advantage.

The schizophrenic views of the Fed and its inability to stay steady on advisement can summed up as follows. Today this was also compounded by flat-lining consumer prices in July.

The U.S. dollar hit its lowest levels in more than seven weeks against the euro, yen and Swiss franc on Tuesday a day after dovish comments from a San Francisco Fed President John William.

The week started off on a positive note for gold. It rose $3.00 per ounce (at 4PM Eastern Time) with a tangible assist from a weaker dollar. Silver rose as well, more or less in the same fashion, but with more upward momentum provided by regular trading.

In spite of early-day trading optimism, gold turned negative after noontime, even as a weaker U.S. dollar gave it some underpinning and is off about $4.00 at 4PM in New York.