Gold

Equities were up a small amount today amid cautious holiday trading, but the U.S. dollar continued its climb to supremacy, helping push gold lower. But the dollar doesn’t tell the whole story today for gold.

The chief outside market influence, crude oil, was down severely again, by around 2%. Gold was dragged down on that ride.

Short coverers and bargain hunters decked the halls today and drove gold prices up by almost $20 (as of 4PM in New York). As we have warned recently, this is a volatile time of year and today proved the point. On top of that, investors are squaring their books as the year ends and the best info we have is that one or two major players jumped out of their short positions and voila...

Well, not so much gold and crude. Pricing continues under pressure for those two leading commodities and the end of the downward push is nowhere in sight.

The news today is dominated by the revision of U.S. GDP to reflect 5% growth in the third quarter. After starting the year in the negative by -2.1%, the world’s biggest economy has become a roaring beast out of a story legend. The second quarter saw 4.6% growth. Combined, year-to-date, that means that the economy is growing at a 3.75% rate for the year.

As oil continues its spectacular decline, and prices for gasoline start eyeing $1.50 per gallon in some places, inflation seems like some old fading cowboy from a Saturday afternoon movie serial riding into the sunset on his aged horse. Goodbye, Old Paint. (That’s the standard name for an old cowboy’s horse.)