Gold

Some days, a number of small items conspire to move prices of gold and silver one way or another. naturally, since we are now in a short trade, we want to see gold move down. It did not deign to convenience us with that kind of action today. A bundle of smallish reasons led it in the other direction.

And of course, the gyrations of the dollar.... despite a weaker dollar, the price of gold fell a little over a dollar. But the session essentially gave us a push and pull between the bear and bull.

The dollar was up against the euro, yen and British pound today, the tiger uncaged continuing its late-summer rampage.

That sent just about everything but equities down, although the NASDAQ was off a bit today.

After yesterday's dramatic price retreat yesterday and a plunge to 1216 in intraday trading today, gold has recovered and is posting a very modest gain today in the late afternoon.

Short covering, bargain hunting and opportunism are at work. Many traders sensed gold had fallen too far, too fast. But the fundamentals are in place for further declines once we get past this small rise.

Traditionally, low interest rates mean a weak dollar and higher interest rates a stronger dollar. Traditionally also, by now inflation should be ringing its bell, beating its drum and howling like a banshee.

But, even with interest rates as low as the Fed will push them, the U.S. dollar is relentlessly pushing up and up. This, of course, has the effect of pushing gold down.