Gold

A decline in the U.S. dollar today gave gold the boost it was looking for, accounting for more than half of the session’s rise of over $9.00.

Equities are struggling for a variety of reasons. A sell off in German bonds helped trigger one in the U.S. bond market, although both paper issues have since recovered significantly.

Today, everyone from Wall Street to the City of London to Hong Kong was weighing reaction to the good but mixed U.S. data released last Friday.

After a rocky first quarter, the American economy rebounded with stronger job growth in April and prospects look good for May. However, is it enough, ask investors, to warrant an interest-rate hike by the Fed in June.

The long, cold lonely winter in jobs growth ended with the April thaw. The U.S. Department of Labor released data today that was pretty much spot on predictions at an addition of 223,000 new jobs created.

After yesterday’s negative reaction in dollar trading due to the weak – nearly anemic – ADP private labor report, the U.S. dollar turned around almost 180 degrees today. The rise pushed gold lower.

Amidst an off-handed remark by Fed Chairwoman Janet Yellen about stocks being very high.

Fed Chair Janet Yellen made the comment at a panel discussion with IMF Managing Director Christine Lagarde. "I guess I would highlight that equity valuations at this point generally are quite high," Yellen said.

The U.S. dollar traded lower today, giving gold almost all of its upward movement.

Gold recovered from the steep decline last week. Yet it is still trading within a range, and probably will continue to do so until the Federal Reserve takes some sort of concrete action concerning interest rates.

This week we will see any strong bullish tendencies in gold prices troubled by the U.S. Labor Department’s report on job creation for the month of April.

Mayday is a bank and trading holiday in Europe. That thinned out the trade volume for gold and other precious metals, as well as affecting other markets.

But, as we know, rust never sleeps. The dollar was bid up robustly today and that helped knock gold down by about $5 in afternoon trading in New York. (Gold is off its lows for the day at 4 PM New York time.)

Traders in different markets seem to be singing from very different hymnbooks today.

Gold was smacked around by analysts’ interpretation that the Fed statement was quite hawkish to which we reply: “Huh?”

The statement issued after the FOMC meeting today reflected pretty much conditions in the U.S. economy as seen by a large cross section of economists, investors and traders.

The slowdown in the first quarter was due to transitory influences.