Seven days in April send a message – loud and clear
by Michael J. Kosares
I did not want the day to pass without posting a few words on gold’s significant push to the upside, now trading just shy of the $1300 mark. To be sure, the dual positions with respect to rates on the part of the Bank of Japan (to stand pat) and the Federal Reserve (to remain ultra-dovish) played a role in the dollar’s recent weakness and gold’s strength. Those determinants though, in my view, are only part of the story, and the few percentage point drop in the dollar against the yen over the past week is really not enough to justify a nearly $60 rise in the price of gold over the past five trading sessions. The bigger determinant has been China’s underpinning of the gold price on two different occasions over the past week after it had taken a major turn to the downside in New York trading.