Now you are wondering, what is happening? The answer is the Federal Reserve. The Fed minutes stated that the central bank was ready for another round of quantitative easing to stimulate the economy. That means more inflation and a scramble to buy risk orientated commodities and securities.
The dollar drop caused a knee-jerk reaction in the euro. The December euro contract is trading at 1.40740, up 0.0118. Gold, which set new highs yesterday, is again moving higher with the December contract up $7.10 to $1,377.60 per ounce. Oil is also higher with the October contract trading at 83.48 per barrel, up 0.47.
The Fed wants higher inflation, and by golly, it is getting it in spades! The problem is now the horse is out of the barn and it may not be able to get it back in.