The Metals: Gold saw modest gains in Asia and rose almost $10 in London to as high as $1161.54 by about 9AM EST before it fell back off to almost unchanged at $1151.98 by late morning in New York, but it then stormed back to $1160.67 in the next hour of trade and ended with a gain of 0.59%. Silver rose 30 cents to as high as $18.49 by around 9AM EST before it pared its gain a bit in midmorning New York trade, but it still ended with a gain of 1.21%. Euro gold remained at about €848, platinum gained $11.50 to $1722.50, and copper rose to about $3.61. Gold and silver equities rose roughly 1% by late morning and stayed at about that level for the rest of trade. The Economy: Report For Reading Expected Previous CPI Mar 0.1% 0.1% 0.0% Core CPI Mar 0.0% 0.1% 0.1% Retail Sales Mar 1.6% 1.2% 0.5% Retail Sales ex-auto Mar 0.6% 0.5% 1.0% Business Inventories Feb 0.5% 0.4% 0.2% In response to a question before the joint economic committee today, Bernanke, among other things, was reported to have said that the fed will not inflate its way out the massive amount of debt recently amassed. The fed’s Beige Book noted that the “economic recovery is spreading to most parts of the country. Merchants are seeing better sales and factories are boosting production, but many companies are still wary of ramping up hiring.” Tomorrow at 8:30AM EST brings Initial Jobless Claims for 4/10 expected at 440,000 and the Empire Manufacturing Index for April expected at 24.00. At 9AM are Net Long-Term TIC Flows for January expected at $38.9 billion, and at 9:15 is Capacity Utilization for March expected at 73.3% and Industrial Production expected at 0.7%. The Markets: Oil rose about 2% after the Energy Information Administration reported that crude inventories fell 2.2 million barrels (the first drop in eleven weeks), gasoline inventories fell 1.1 million barrels, and distillates rose 1.1 million barrels. The U.S. dollar index and treasuries fell after better than expected earnings reports sent the Dow, Nasdaq, and S&P roughly 1% higher by the end of trade. Among the big names making news in the market today were Daimler, Intel, JPMorgan, Morgan Stanley, and Apple. The Commentary: “Dear CIGAs, Comments out of Fed Chairman Bernanke regarding the state of the economy and the consequent need for maintaining a low interest rate environment were enough to give the Dollar the kiss of death today. It fell through its recent floor of support near 80.20 on the USDX and is very close to confirming a topping formation. A pair of closes below 79.75 would get the attention of the hedge funds. Keep in mind that the last Commitment of Traders report shows a fairly large speculative long position in this market. If that key technical level gets taken out, an avalanche of sell orders are going to be activated. The greenback is trying to claw its way higher as I put this commentary together but the bulls have some serious work to do if they are to avoid getting hammered. Perhaps the only thing keeping them from being swamped for now is lingering fears over the overall health of several nations in the Euro Zone. In other words, it is the same “The Dollar may be a piece of junk, but the Euro is hardly any better” thing that has been occurring in the Forex markets for some time now. The question is which one is least hated and despised. None of the drama surrounding the Dollar was missed by gold which fought off bullion bank selling as the Dollar began falling upon Bernanke’s remarks. Overnight it pushed into that lap region I noted yesterday but was unable to push on through there and trigger enough buy stops to affect price in a consequent manner. If you note on the chart, the selling is appearing at the former resistance level which was taken out Friday and Monday of this week and is once again serving to cap the upside progress in the metal. The battle lines are clearly drawn therefore with bulls needing a strong push through that level again to take command of the market while bears are hoping that bullion bank price capping can hold down the charge of the bull brigade. Strength in the mining shares as evidenced by the HUI is helping the cause of the gold bulls at the Comex. It took out yesterday’s high but thus far has not been able to garner any additional upside momentum. The bounce off the uptrending 10 day moving average is healthy. Crude oil looks like it is getting ready to take a run back to $87 again. It is a bit tricky trying to read whether it is responding to the weakness in the Dollar or the seasonal tendency for stronger demand as we enter the warmer months. Either way, it looks as if the cheap gasoline prices we had been enjoying the last year are now an ancient relic of the past. I want to reiterate, rising energy prices as evidenced by crude oil are helpful to the cause of gold. Energy costs affect just about every sector of the economy that one can bring to mind whether it is food production (agriculture), manufacturing, transportation (shipping, airlines, etc) or even the costs incurred by the local contractor who has to drive from locale to locale. If crude oil pushes past $100 again, watch for more calls to have the “evil, vile speculators” curbed although those same “evil, vile speculators” are hypocritically adored by the feds when they turn their guns on the equity markets and goose them ever higher. Speaking of being goosed ever higher, the S&P just made yet another new yearly high this time propelled by the earnings report of JP Morgan. It’s nice to know that 74% of their income came from trading revenue. Bonds are lower today (making sense for the first time) with the potential for a double top forming near 116^ 22. With the yield on the Ten year back below 4.00%, near 3.83, the feds must be breathing a sigh of relief. We’ll have to watch the technical action in the long bond tomorrow to see if we get a clue to the next move. A rather quiet move by the CCI (Continuous Commodity Index) seems to be going unnoticed by many but it did manage to thus far make a 3 month high in today’s session. Palladium has made a move of $150 in two months time and is trading at an astonishing $548/ounce price. Platinum, not to be outdone, has added $180 over the same time frame and is pushing up against $1,750. That may be partly responsible for the strong buying that we have also been seeing in silver which is acting like it wants to push up to $19. It certainly seems as if these metals are the recipients of substantial investment flows. Gold is not going to be left out of the party.”- Dan Norcini, More at JSMineset.com

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