April 15, 2013
Weekly Market Outlook
By Keith Schneider
This Friday's dramatic drop in gold bullion finally put "bear market " status on the yellow relic as it has dropped over 20% from its intraday high of $1948 that was made on September 2011. The current state of the Global Macro climate is heating up and killing off Gold Bugs even as the race between countries to print money and devalue their currency is accelerating. This makes the drop in Gold even more curious. Add into the cauldron the North Korean saber rattling, lingering Cyprus banking issues and, Syrian rebels aligning with Al Qaeda. Normally, this should be a catalyst for higher gold. Even dramatically lower interest rates here in the US this week was not enough to boost Gold. For gold bears, the biggest negative has been the hot US equity performance and the rumor that Cyprus might have to sell bullion hoard to pay for additional loan losses. Still, the Bull case for gold seems stronger but Gold has always traded primarily on psychological factors as opposed to "fundamentals". With this break, the Gold bugs have become psychologically endangered. If gold can't rally on mostly good news for it then why continue holding it? Clearly this development indicates a Global Macro climate change.
The overall US equity Market put in a stellar week. NASDAQ closed on new 2013 weekly highs as did the Dow and S&P 500. Biotechnology continues to make new highs, while the other stronger sectors took a breather on Friday-Retail and Real Estate both had inside days The Financial sector closed red, but with no real damage done, same with the Semiconductors, Transportation and Homebuilders. Not surprising, Oil and Energy weakened with Gold. Monday could well set the tone for the entire week; especially, relationships and how they continue to line up with one another.
Note: No video this week
Every week you'll gain actionable insight with:
