The GSCI just notched a brand new 5 month low this morning, especially with the energy sector dropping as it has. Even the high flying cattle market has been unable thus far to resist the selling.
Once again, the safe havens are back on as the US Dollar and the Japanese Yen are higher with bonds pulling into plus territory after collapsing a full point earlier in the session.
End of month book squaring is further muddying the waters today.
The low reading for initial unemployment claims has spooked gold bulls who are worried that the upcoming payrolls numbers are going to come in stronger than expected. The thinking is that the Fed's hand is going to be forced to raise interest rates sooner rather than later. That remains to be seen but with the sharp drop in equities, that sort of talk is a bit premature. It does however underscore just how sensitive the gold market is to any talk of higher interest rates. Higher rates will act as a headwind to gold, which throws off no yield.
The US Dollar has not yet been able to convincingly push past 81.60 basis the USDX. If it does, look for more selling across the gold market especially with commodity prices heading lower, especially crude oil and its products.
It is going to be interesting to see whether or not the equities experience one of those famous last hour recoveries today.
Gold has fallen back below the 45 day moving average and looks to be setting up a test of the support zone noted on the chart near the $1280 level.
Crude oil lost its chart support this morning but thus far has managed to find a floor above the $98/barrel level. There looks to be some better defined support near 97.60 - 97.50. the ADX is rising but does not yet indicate a trending move. That suggests the market will find some support sooner rather than later. If the secondary support level does give way however, crude could retrace towards 96. That would put it at the lowest level since early February.
