Well, the super facile and probably wrong explanation is that the Euro dropped because of the bay of PIGS. That fried the carry traders who were short the clownbuck, in turn causing commodities to drop. Other risk bets were taken down too (I guess including sovereign debts/US treasuries, as they are becoming perceived as a "risk bet").
Conversely, maybe news that the IMF is wading into the Bay of PIGS means they'll be forced to sell their gold sooner rather than later to pay for it, which is why gold got sold in advance. I think the PIGS concerns are overblown relative to their real impact, but with the lack of transparency now any cough isn't interpreted as a cold, or even pneumonia....it's terminal fcuking cancer in the eyes of some specs. Of course the Spoos are unaffected because the Fed is propping those, they have a Bernanke poot that leaves Greenspan's in the dust.
One thing that really has me concerned is the action of gold miners vs the metal. The dirts have been underperforming for at least a year, even with other stocks running like hell. I'm not sure I need a reason, but if yer gonna take the extra risk of owning the stocks above and beyond owning the metal you should be getting compensated for it when the metal is going up AND general markets are going up. Makes me think the better strategy may be more bullion and less juniors going forward, but maybe they play catch up. They need to start soon, in any event.
Who knows really? The dollar doesn't look to me like it's going a lot higher here, but if we get over 82 or so I'll definitely revisit that. Rising taxes, falling wages/employment and rising deficits aren't what I'd consider bullish for a currency but it's a new world, I guess....
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