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Strategies & Market Trends : Dino's Bar & Grill -- Ignore unavailable to you. Want to Upgrade?

To: Goose94 who wrote (12853)	5/10/2015 5:57:45 PM
From: Goose94	Read Replies (1) \| Respond to of 202702

When Will Gold Start Reacting To Bullish Intermarket Dynamics? The gold market is stuck in the doldrums and it is not even summer yet. While the U.S. dollar has been falling since mid March and the price of crude oil has been climbing over the same time period, gold has gained modestly during that time but for the most part is sitting out the positive intermarket dynamics seen this spring. But, will the yellow metal start reacting to these bullish factors soon? Let's take a look. Traditionally, a falling dollar is a bullish factor for the yellow metal, which is priced in greenbacks on the global marketplace. In simplistic terms, a declining dollar translates into "cheaper" gold prices for world players. Meanwhile, rising crude oil prices are generally seen as inflationary and in turn gold bullish. Nearby crude oil prices have climbed about $18 per barrel since mid March. Nearby gold futures have gained off the mid March low around $1,142 per ounce—hitting a high at $1,224.50 in early April, before retreating back to the $1,180 zone currently. But, the rally failed to attract follow-through buying above the $1,200 level. What is behind this lethargy in gold? Expectations that the Federal Reserve will hike interest rates this year continues to dampen enthusiasm for the yellow metal and is putting the brakes on sustainable rally moves. While most analysts are still expecting at least one rate hike this year—with the September central bank meeting as the likely first timing of a interest rate move, others continue to warn that the U.S. economy may not be as strong as the Fed projects. First quarter gross domestic product (GDP) numbers disappointed sharply with a mere 0.2% rate of growth. Even if the Fed does hike rates for now the U.S. economy is not showing signs of an inflationary pick-up. The inflation rate remains below the Fed's target level. DoubleLine Capital, which manages $73 billion in fixed income funds told S&P Capital IQ this week that the Federal Reserve is not going to raise rates in 2015. The U.S. economy is not strong enough to support higher rates, Bonnie Baha, head of global developed credit for DoubleLine and a member of the firm's Fixed Income Asset Allocation committee, told S&P Capital IQ this week. "While the U.S. economy should improve somewhat in the remainder of 2015, Baha thinks investors are preparing too early for Fed action. She believes the 30 basis point increase in the 10-year Treasury yield in the past two weeks to 2.20% stems from technical trading reasons as fundamentally nothing has changed," according to an S&P Capital IQ research note. The gold market continues to consolidate above major long-term support at the $1,130-$1,140 region. If assumptions from DoubleLine capital prove true in the weeks and months ahead, gold investors could see the yellow metal start to take notice of its improving intermarket relationships. By Kira Brecht, Kitco.com