The hawks’ argument goes something like this: Raise rates now and slow the economy so the Fed does not have to raise rates more vigorously later and possibly cause a recession. Let’s say for a minute that rates right now are at 0.50%. So, if rates are raised, say twice in the next three FOMC meetings, the economy will be slowed by a factor of X.

Despite reasonably strong upward movement via regular trading, gold took it on the chin because of a surging U.S. dollar. Silver met the same fate but without the backing of regular trading efforts. Gold was off around 0.55%; silver was off 1.00%

The dollar was up almost 0.75% against the euro and nearly 1.90% against the British pound.

Although the biggest story of the day was rising oil prices, let’s talk about gold first.

There are a number of key fundamental issues afoot in the markets today. Among them are the confusing new jobs data; the persistent softness in gold; the seeming hitting of a ceiling by oil prices, and the free fall of the British pound due to what is now being called “hard Brexit.”

New weekly unemployment claims came in lower than analysts had forecast, generating more sentiment that says interest rates will be rising as soon as politically expedient.

The services sector accelerated in September, reaching its highest level in 11 months, according to a closely followed report released Wednesday.

The Institute for Supply Management’s services index rocketed – and that’s no overstatement – to 57.1% in September from 51.4% in August. Any reading over 50% indicates improving conditions.

It was a long way down. Gold fell $43 per ounce in morning trade in New York, or more than 3.25%. Silver followed suit and then some. It fell more than 5.00%. The question now becomes whether physical buyers will take advantage of the plunge and step in to buy at these low levels.

A thought to open October on The Gold Forecast: October is the most volatile month.

With the growing realization that Deutsche Bank’s problems may be more than temporal but less than fatal, the U.S.-listed stocks of the megabank rocketed up 14.5% today. Needless to say, that pulled equities up along with it. The three major New York indexes were up between 0.80% and 0.90% each.

The U.S. dollar strengthened vs the euro in U.S. trading as Deutsche Bank sold off dramatically after approximately ten hedge funds downgraded the German megabank. In afternoon trading the U.S. listed Deutsche stock is off 6.5%.