Gold Closes At A Record



While the S&P; 500 slipped yesterday, after 4 days of gains, gold rallied and closed at a record high. Speculation has it that the Fed will purchase some $1 trillion in bonds to support the economy. At the same time, the dollar fell, which helped silver and commodities and pushed interest rates lower.

The major indexes, with the exception of the Nasdaq, slipped slightly as overhead resistance remained. The pullback was minor, and I would not be surprised to see another attack at the 1,130 level of the S&P; 500.

The Fed’s purchase of $1 trillion in treasuries is widely regarded as a play to improve economic stability in the financial markets while, at the same time, be a boost to GDP by as much as 0.4%. Whether this is just simply ivory tower theory or will actually work as planned has yet to be seen.

Retails sales climbed for the second straight month, which was interpreted as reassuring since economists actually had expected a decline. Some stimulus via bigger back-to-school discounts, tax-free holidays and extended jobless benefits may have lent support to these climbing numbers.

It makes me wonder if anything can possibly be sold these days without prodding or the use of special incentives.

Chart courtesy of marketwatch.com

About Ulli Niemann

Ulli Niemann is the publisher of "The ETF Bully" and is a Registered Investment Advisor. Learn more
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