The ‘all one market’ vs. the US dollar scenario is breaking up a bit. Commodities and the Euro are doing well. Gold is hanging around and the US stock market? Not liking the weak dollar so much. The precious metals want to see silver get off the floor, but it’s got a heavy open interest sitting on it. This is a tough market, folks.
One is dropping below its MA 50′s and the other is popping above, after the ECB sat on its hands with rates but made a lot of Jawboning about ‘unconventional’ stimulus in the battle against the dreaded deflation.
It is unbelievable the degree to which people still have confidence in these clowns (including the ones packed into the little clown car here in the US), but apparently they do.
It remains all one market vs. the US dollar, AKA the anti-market. SPY has actually remained somewhat on its own course over the last week, but the others are strictly in anti-USD mode right on down to the little hook upward this morning as Uncle Buck hooks down. Silver, which I got longer on yesterday, is the most sensitive.
Now we will get to test the theory that little of what most people consider fundamentals for gold actually matters. That would be things like Indian wedding season, jewelry demand, central bank buying/selling and the one hyped in the gold “community” more than any other, China gold demand.
From Hard Assets Investor: Gold Flat Amid China Demand Drop
According to the China Gold Association, demand in the world’s largest No. 1 consumer may fall 17 percent this quarter from a year ago. An official for the trade group said the decline wasn’t unusual given the huge spike in demand last year.
“Last year was a peculiar year when we saw a big fall in prices,” Zhang Yongtao, vice chairman of the CGA, said. “People bought a lot of gold, and I think demand will start climbing again once the festive and marriage season begin later this year.”
‘But but… China gold demand is strong!!’ kept people bullish last year as gold got blown up. Marriage season? Please. For me it is investment demand that matters.
The Euro is closing in on a target (the top downtrend line) we have had on since the bottoming pattern formed during the Euro crisis drama a couple years ago.
Contrary to this hair brained declaration by a talking head on CNBC (“I like the dollar; it’s going to kill gold for sure and I think it’s great for American corporations”) the US dollar has dropped and American corporations like it just fine. That is because American corporations like inflation against a
defl err disinflationary backdrop just fine.
Here is a busy chart from recent NFTRH showing Uncle Buck in a Bear Flag after the big FOMC breakdown, Euro breaking out, Yen broken down from a Symm-Tri and two commodity currencies hanging around at or below resistance.