Gold futures are on a tear this morning. December Gold traded at $1012.40 per ounce then fell back to $995.20 (prices as of 11:00 EDT). December silver reached an eleven month high, trading at $17.015 per ounce, then falling back to $16.145 per ounce. The other precious metals also traded higher. October platinum traded at $1278.90 per ounce up $30.10 and December palladium was trading at $293.00 per ounce, up $4.35.
The main culprit was a weaker US dollar. The December US dollar traded at $76.715 down .275. The dollar has declined steadily for six consecutive days.
Oil is little changed with October crude trading at $71.45 per barrel, up only four ticks. The Dow is steady with the September contract trading at 9586 up 17.
There are some inflation fears out there driving the metals higher and the dollar lower. The gold/dollar relationship is perhaps the best gage of inflation, either real or anticipated.
The stock market is just hanging in a narrow range. Whether it will react to the gold/dollar moves is uncertain. The market does not like inflation, nor does it like a weakening dollar.
As previously mentioned, keep and eye on the gold/dollar relationship as a way of judging market trends both in the stock and commodities markets.
Do you believe that the stock market will sell off at these levels?
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