Gold

One would have thought that after Tuesday’s big drop in gold there would have been at least decent interest in the Asian market, if only to create and then ride the bounce. That wasn’t the case. Interest was at best marginal.

A slightly mixed but nevertheless positive uptick in durable orders helped propel the U.S. dollar higher today. Taking out aircraft as a component meant the index was up 1% in April. Aircraft is taken out because it is volatile, orders sometimes taking years to develop and then exploding onto the graph, skewing the durables measure.

Forget the “Dismal Science.”

Everyone head for the bunkers. Pull down the metal shutters. The core CPI rose 0.3% in April, (although many would say it’s closer to 0.2% or even 0.1%).

Despite a serious assist from U.S. dollar weakness, gold fell again today, embedding itself deeper into its seemingly unbreakable long-standing range.

Mixed data from the U.S. Department of Labor on weekly unemployment claims didn’t help. They fell slightly more than was anticipated. On the other hand, the four-week running average is as low as it’s been since the year 2000.

A modest bounce after yesterday’s bloodbath has once again thrust the yellow precious metal into the “range game.”

Some might have expected a bigger up-move after the minutes of the FOMC’s April meeting were released. Those minutes clearly express the feeling among committee members that yes, the economy is improving, but no, not enough to trigger a rate hike. For instance:

If there was a doubt that the U.S. dollar had pulled out of its correction recently, today’s booming buck erased all concerns.

U.S. dollar strength pinned down any gains gold made today in so-called regular trading. The recently docile dollar really roared against major currencies, up over 1% against the euro.

But: whither the dollar in the near term? We need answers to the question as gold traders.

Factory production stalled significantly in April, as American manufacturers deal with blows that range from a strong dollar to cheap oil.

The U.S. economy has given us some weak data points in the last two weeks as we discussed over that course of time in our fundamentals section. Employment remained soft into April; retail sales are very soft; manufacturing has been spotty.

Flat retail sales in April ignited a sell off of the U.S. dollar today, boosting gold all by itself by not quite 1.00%. Investors and traders joined in the love fest and kicked the yellow precious metal even higher.