Gold Takes One To The Mid-Section!

* U.S. dollar has the conn again today.
* All currencies are down again..
* What happened to Gold yesterday?
* Lola needs to go back to economics school! .

Good Day. And a Tub Thumpin’ Thursday to you! I’m not doing any Tub Thumping this morning and probably won’t the rest of the day or tomorrow, as this is an infusion day. I woke up in a haze, can’t find my balance, my eye won’t focus correctly, I’m in bad shape, and above all, I just want to sleep.. UGH! So, here’s how this will work today. This will be short-n-sweet, and tomorrow is up in the air at this point. I think you understand. So, Poco greets me this morning with their song: Just You And Me.

Well, it seems the dollar, which had the conn yesterday, has carried that on throughout the night, and is grinding higher this morning. Gold really took one to the mid-section yesterday, losing more than $28 on the day. I found that interesting considering the talk this week about the coming end of the short Gold paper trades. It was as if the Gold traders stuck out their collective tongues and said, “not yet!”. I wasn’t sold on that story about the end of the paper trades, instead it was more of wishful thinking.. I just don’t see the reason for the selloff. Nothing fundamentally changed in the world, and there was no real economic data prints to look to. I know what I would put this down as.

The Chinese renminbi is the worst performer overnight, as the Chinese pushed the renminbi down by a large margin in the fixing. The rest of the currencies are all down VS the dollar this morning, some by larger margins and some by tiny margins. The Euro, yen and pound sterling are down by such small amounts you could call them “flat on the day”. But like I said above, there’s nothing going on that would move the currencies and metals like they’ve moved in the past two days.

The price of Oil slipped again yesterday. Two steps forward, one step backward is how this all seems for the price of Oil these days. But a $2 drop in the price of Oil, has the gas stations all out changing the prices they display for their grades of gas! UGH!

Today, we get to see some “real economic data” in the form of February Durable Goods and Capital Goods Orders. Some might like the taste of the Markit PMI for March, but the real focus today is on the “real economic data”, and I’m going to go out on a limb here and say that the Goods Orders will both be disappointing and probably print negative. Again!

To recap. The dollar strength yesterday has carried though overnight and the dollar continues to grind higher this morning against all currencies and the metals. Gold took a shot to the mid-section yesterday and saw more than $28 of its value wiped out throughout the day, on a day when there was no news, no data, no fundamental changes, just sellers, I guess. You and I know what’s behind this move. The U.S. Data Cupboard finally prints some “real economic data” today in the form of the Feb. Durable Goods and Capital Goods Orders.

For What It’s Worth. I came across this article on the Bloomberg this morning and it just ticked me off to no end, and then had to make sure I used it here. So, here’s the deal, Lola (Goldman Sachs) is telling the Fed how to deal with their monetary policy. Hmmm. let’s see what the Bloomberg says about this.

“It’s time for the Federal Reserve to end its dollar fixation. That’s the takeaway from a Goldman Sachs Group Inc. report Wednesday that suggests the U.S. currency poses little threat to the Fed’s inflation goals, challenging the policy makers comments on the currency.”

Chuck again. Are you kidding me? Even in my current state of mind, I have to take issue with this! First of all, I don’t know what schools of economics the boys and girls at Lola went to, but they need to go back and relearn how a currency influences a country’s inflation! And that’s all I’m going to say about that today. I’ll come back to this when I have a clear head, and am loaded for bear!

Currencies today 3/24/16. American Style: A$ .7515, kiwi .67, C$ .7550, euro 1.1170, sterling 1.4135, Swiss $1.0260, . European Style: rand 15.49, krone 8.5015, SEK 8.2890, forint 280.90, zloty 3.8275, koruna 24.2150, RUB 69.29, yen 112.65, sing 1.3685, HKD 7.7606, INR 66.63, China 6.5150, pesos 17.66, BRL 3.6832, Dollar Index 96.07, Oil $39.08, 10-year 1.86%, Silver $15.30, Platinum $953.93, Palladium $578.89, and Gold. $1,218.91

That’s it for today. Thanks to all that sent along Birthday Wishes to me. Yes, I used to keep my birthday a secret from Pfennig Readers, but no longer, I’m proud of my birthdays now! .I went to the ballgame with family yesterday, and shouldn’t have. I should have stayed home and bagged the game. I was glad I went (at the time though) as it has been a few years since Alex and I went to a game together. Shooting Star takes us the finish line today with their song: Last Chance, which is a classic rock song from the 70’s. Ok. infusion day today.. .That infusion room is not a happy place, folks. But the nurses there try to keep it upbeat with hugs and smiles for everyone. This one little Asian nurse, gets the biggest kick out of my hugs, when I pick her up off the ground with one arm. She laughs, and giggles. It makes my day, after getting poked and so on. And with that I’ll get out of your hair for today.. See? Short-n-Sweet as I promised. I hope you have a Wonderful Wednesday and Be Good To Yourself!

Chuck Butler
Managing Director
EverBank Global Markets
Editor of A Pfennig For Your Thoughts