A lot of investors are confused now. Despite the poor market behavior, and the seasoning weakness, the volatility is still very low. The market remain fearless! And that is at the ATH (all time high)!? (SPX is down 1,8% from it`s ATH) P/E for the USA is 20. In Europe it`s only 10! You know where to invest.
Draghi said he will pump a lot of money into the European banks if needed. That statement will push the gold prices up, and resistance for the gold is still $1400. I think the producers are glad to see a stabile gold price, because they are often signing contracts only once a year.
Normally, the gold prices goes up when the dollar goes down, but sometimes we have seen their both are going down in the same direction. That`s unusual. A rally in the dollar could probably push down the gold price, and maybe down to $1000.
If the gold prices goes up to $1500, the cost will also rise. As the goldprices have declined for a long time now, many miners have to cut their cost. So, stabile goldprice is good for the mining companies.
The European economy has emerged from the recession, but the growth has still very little momentum and remains dependent on the demand from Brazil and China. In addition, the European sector is very sensitive to the decisions made in the white house. Many things can still happen with the Syria case. Investors don`t like war.
So far this month, hedge funds are up 1,7% while SPX is up 5,7%. Warren Buffet called the FED; the worlds greatest hedgefund in the world. Funny! When FED is beginning to taper, the markets will go down. If the interest rates goes up and if the bond market falls, the FED will continue to print money. I will follow these news today: Core Durable Goods Orders at 8:30am, New Home Sales at 10:00am, Crude Oil Inventories at 10:30am.
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