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A Small New Year's Gift To Bulls

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A Small New Year's Gift To Bulls
 
Increased physical demand in Asia gave gold it's big push today, although it had the perverse effect of driving the price up, thereby driving out what promised to be more buyers. (In China and Singapore, in particular, retail prices of gold jewelry are posted hourly or more frequently on an electronic system or through smart phones.)
 
After squaring positions and booking tax losses in gold right up till December 31, traders have turned around and bought back in. Since the equities markets were down today, one can safely assume the money was squeezed out of stock positions. It may also be that some investors are floating a trial balloon to see if 2014 is going to be different from 2013, testing to see if gold can regain some upside momentum. 
 
Some analysts are saying that the next big worry is the FOMC meeting at the end of this month, which will reflect, so it is said, quickening U.S. economic activity. Nonetheless, data released today showed new unemployment filings were down, but significantly less than forecast. Additionally, the Institute for Supply Management said its purchasing managers index fell to 57 from 57.3. Any number over 50 represents expansion, but eyes will be on such data to see if the American economy is softening.
 
Britain's economy slowed to a near stop last quarter, a decline in exports hurting the Brits' manufacturing sector.
 
A sort of side indicator - the number of and dollar value of mergers and acquisitions rose in '13, finally returning to pre-recession levels.
 
Something else we should note in the market today is that the strength of the dollar knocked off about $6 from the higher price of gold.
 
All of this must be taken with a few grains of gold dust. We are in the slow easing back in from holiday schedules and normal trading volumes and normal market participants won't return till then.
 

As always, wishing you good trading,

 

Gary S. Wagner - Executive Producer