Trading lower ahead of the U.S. House's vote to raise the debt ceiling, gold never really recovered. The move lower was abetted by profit-taking and chart consolidation.
We are in the midst of yet another earnings cycle for equities, and many eyes will be on key companies in consumer, heavy equipment, communications and computer gear. Apple has already leaked its big news: the first quarterly decline in earnings in 10 years.
Sometimes, as equities go, so goes gold. So, the overall direction of the stock markets and their reflective indexes need close watching just for the next 10 days or so during this earnings season.
As predicted here a number of times in our communications, Japan is postponing the "nits and grits" of its stimulus program, that is, the direct aid to municipalities, to entities looking to build infrastructure, improving school physical plants, etc. This sent the yen up in the midst of a terribly bearish market for the big east Asian economy's currency.
About 1/5th of today's decline in gold is due to the corresponding fall of the dollar in relation to the rising yen. The dangerous crosscurrents affecting gold and silver right now are (still!) the European economic situation and the big question: how deep and how fast will budget cuts come to the United States?
Otherwise, there was scant news to fundamentally drive precious metals today.
A parting question: Can gold function as a safe haven and a risk play at the same time (not the same moment, of course)? Sign into our Facebook page and give your thoughts, please.
As always, wishing you good trading,