Gold

For most of the day, seeking firmer fundamental trading direction and finding little to none, gold found itself at the mercy of a slightly more robust U.S. dollar. As we reached the end of the trading day, though, gold succumbed to regular trading declines brought on by optimism in the stock markets.

Sentiment that an interest rate increase is moving farther and farther out on the time horizon continues to throttle back dollar strength. This, in turn, helped gold rise today.

Provocatively, regular trading showed a loss, small as it was.

While there is going to be continuing speculation regarding the possibility of an interest rate hike by the U.S. Federal Reserve, there are some countervailing reasons as to why one should hold gold in a balanced portfolio.

Oil-producing nations in and out of OPEC are beginning to rattle their sabers again about production cuts. That helped oil rise about 3.50% on the session.

We’re all familiar with central banks talking their currency up or down for self-serving reasons. Think of oil as a currency and ministries of oil as something parallel to a central bank in petro-states.

The first print of July employment data shows an extremely strong labor market, one that can see sustained growth for some time, and one that just might be the harbinger of meaningful inflation in the near future.

The 255,000 new-jobs figure is impressive enough. Beyond the raw numbers though, we are seeing big, important details.

The biggest news of the day emanated from London where the Bank of England lowered its overnight rate to 0.25%, lowest ever. The central bank also announced other various stimulus measures that hover around the £170 billion.

Data released today by payrolls processor and survey-maker ADP showed that the U.S. private sector added 179,000 jobs in July, more than experts predicted. That gave the U.S. dollar gave the dollar a middling-to-strong boost.

Weakness in the U.S. dollar is pushing the markets around today, and gold is especially benefiting. In mid-afternoon trade, gold is up around $12.00 of which almost $10.00 is due to the sagging dollar.

Markets got off to a shaky start Monday with no financial instrument really holding sway – at least not on the positive side.

It is hard to discern whether this is just a case of Monday blahs exacerbated August vacation schedules or a reaction to collapsing oil prices.

We are also eagerly awaiting the July labor report due out this Friday. More on that as the week progresses.

The U.S. dollar was softened by data that reporter GDP in the second quarter only grew at 1.2% against expectations that it was going to grow by 2.6%.

A second dinger came in the form of a puzzling drop-back-five-yards-and-punt move by the Bank of Japan.