It’s no surprise that, after last week’s rally, the markets were due for a pullback. Yesterday, things looked a little dicey for a while early on but, as we’ve seen so many times in the recent past, buyers stepped in and pushed the major indexes off their lows for the day. Except for the Nasdaq, we closed slightly below the unchanged line.
Gold again was the star of the day as it topped $1,400 an ounce for the first time. Clearly, this is a sign that all is not well economically speaking. It may also reflect the viewpoint that the Fed’s QE-2 adventure may not work, and/or result in more trade disputes and long term, will be inflationary in nature.
Additionally, concerns about Ireland and Portugal’s financial troubles contributed to a flight to safety, which nowadays would be the precious metals arena.
Silver was up even more than gold, while interest rates and crude oil rose slightly. With the sharp rally of the recent weeks, I expect the markets to continue bobbing and weaving until more upward momentum can be generated.