Gary Wagner provides a brief overview of the day's news as it relates to gold. A former city guy, Gary abandoned the briefcase and tie, and joins readers now daily from Hawaii. Whether you are a newbie or veteran trader, Gary provides a great overview for all levels of investors.

As we projected, the short-covering rally we saw late last week flopped. In fact, it wasn't really a short-covering rally, but rather a small uptick that was seized upon by opportunistic buyers who bid gold up and then sold out at the first quavering moment.

No fundamentals are in place to help with the promise of a big gold rally (unless you count eastern Ukraine).

Equities once more are headed up, their rally pounding across the battlefield. Last week we compared the equities to a wild horse and gold to salmon swimming upstream. Nothing has changed.

U.S. crude and Brent are continuing their slide, although a further decline will now play cat-and-mouse with production costs, winter weather and stockpiles. Dollar strength weighed on energy prices and gold, but not to the extent that believers in lower prices for both commodities did.

One thing further buoying the stock markets today is a wider opening of China's investment apparatus to outside traders and investors. Wall Street gets it right because, after all, despite all the talk of Chinese "reserves," the greatest reserves in the world lie in private American hands, followed closely by Europe. That money is always looking to make money. When we say private, we mean non-governmental hands. So, if a certain bank or corporation invests in China, it will make money.

"The gold market still looks vulnerable,'' Simon Weeks, head of precious metals at Bank of Nova Scotia, said. "There are a lot of people who'd prefer to see positive economic data, equities higher, ETFs lower, and I don't think anything's going to change that in the short term."

Russia is now allowing the ruble to float. We think that spells further strength for the dollar. And you all know what that spells for gold.

The momentum of the U.S. economy is driving practically everything worldwide, and in spite of the critics of so-called fiat money, the dollar is one big king, fat and gaining.

Wishing you as always, good trading,

Gary Wagner
thegoldforecast.com