Gold

Gold struggled today even though it was buoyed up by a decline in the U.S. dollar, which, of course accounted for whatever vitality there was in the prices. Without the dollar assist, gold would have been off almost $12.00.

Although we were off the mark in predicting lower GDP growth (we said 3.3% while the reality for Q4 was 2.6% growth), the trend is what counts and clearly Wall Street didn’t like what it read in the latest report. U.S. and all major world averages, except the Nikkei, were off today. U.S. equities were hit the hardest; the big three all were off more than 1%.

A small bit of U.S. greenback strength nicked a dollar off gold today. It was regular trading that stuck a dagger into the precious metals, however.

While waiting for the Fed to speak, it seems almost all sectors of the marketplace were holding their collective breath. The U.S. dollar stayed extremely strong, except against the yen, which seems to have escaped gravity’s pull.

All of gold’s loss today is attributable to dollar strength.

The Snowman: Given that today was a low-volume day because of the half-blizzard that toyed with new York City, there are some results we have to discount.

After showing deep declines based on fears about Greece’s elections early in the day, the euro steadied and late in the day actually is showing gains against the dollar.

The precious metals, especially gold, were no match for the dollar, which has been howling and screaming like an F-16 to higher highs, faster and faster.

Despite facing tremendous greenback-strength headwinds today, gold and silver are hanging on to their gains in mid-afternoon trading. This is important because it means, among other things, that investors are feeling positive about precious metals as havens, and even as longer-term investments.

Markets seemed to take a breather today. The Dow was up 0.25% on anticipation of stimulus moves by the European Central Bank, and on news that United Health Care and Netflix reported better-than-expected earnings in Q4.

We have spoken about volatility for the last few weeks. Indeed, there is plenty of volatility and not of the type brought on by world events, or economic events, nor even tectonic shifts – as in a major innovation or reaction to one.

The volatility is being created in the financial sectors of many countries and/or regions.