Bill:
Why is the Gold selling off? Central banks selling like you suggested the other day?

Hello everyone,
I've got some beginner questions :

1) Is the price of gold futurs set by buying/selling of contracts AND by spot market ?

2) Are the banks (FED) selling contracts or "real" gold or both ?

3) What can stop the FED to "print" dollars to sell gold futurs ?

Keep the good work Bill !

i've heard and read several comments that we'll rally today because the market always rallies after terrorist attacks are foiled.

sheesh....not that we haven't in the past but no wonder so many people lose so much money to the big firms. that's like betting on the fed. that's like betting on moon cycles.

intraday (60 minute, 20 minute), the indices are in the oversold region from which rally attempts can begin. however, this level of oversold is also where you can see some serious selling for a few hours.

the daily charts have plenty of room to the downside before they are back to oversold.

markm is right. it doesn't look like data will support the bulls here. in a counterintuitive paradoxical way, the only thing that is going to let this thing really rally hard.....is a couple of good semi-panicky selling sessions. deep ticks and high trins.

that could clear the deck because ultimately, this is a problem of inventory. stock certificate inventory. without a clear the decks sell-off, this will be just a slow water torture in which inventory remains trapped overhead.

in the best possible world, they would open up these floodgates and test the july lows today and tomorrow.

Does this explanation of the trade gap figures (EconoDay) make sense to anyone? Now, I did get up at 3:30am this morning, but I think I can still read. Here goes:

Actual $-64.8B
Consensus $-64.5B
Consensus Range $-65.9B to $-63.8B
Previous $ -63.8 B

"Highlights
The U.S. trade gap unexpectedly narrowed in June to $64.8 billion, from revised $65.0 billion in May. The market consensus had expected a June trade gap of $64.5 billion, compared to the initial May estimate of a $63.8 billion shortfall. The smaller trade gap was largely due to a significant decline in oil imports combined with notable export gains. For June, overall exports jumped 2.0 percent while imports rose 1.2 percent. The merchandise trade gap (Census basis) narrowed to $69.0 billion versus $69.6 billion in June. Excluding petroleum, the trade gap actually rose to $44.4 billion from $43.8 billion in June."

So, we previously reported a trade gap of $63.8B. But that was wrong. It was revised to $65B. Now the gap, estimated at 64.5B consensus is really $64.8B. SO THAT'S AN UNEXPECTED SHRINKAGE? How so? You expected 64.5B. You got 64.8B. That's 0.3B LARGER in my math book. The only thing it SHRUNK from was the REVISED figures, which weren't as good as originally reported. In fact, some 1.3B WORSE.

Can someone tell me where I am going wrong here? EconDay normally does a fine job.

If you focus exclusively on the "revised" trade gap for May of 65 billion and you subtract the June gap of 64.8 billion, you get a .2 billion dollar reduction and it "unexpectedly narrowed" or was "a smaller trade gap". If the housing market continues down, I think that trade deficit can drop truly dramatically and we can use this money saved for business IT spending in the US without inflation and, of course, with less foreign money.

I didn't get up as early, but close, and came to the same conclusion but wrote it off as mindrift. Bloomberg sometimes is just as convoluted. You're ok MM ;)

Dang, I hate being right all the time! (gold) ;)

This looks like CBer action Bill on a day when oil is getting whupped so as to exacerbate the decline. They need to hit some stops below 636 spot or else this thing bounces.

ALOHA !!

Today there was a terrorist bomb attempt thwarted by the UK at Heathrow. Blowing up airline jets is apparently good
for the US dollar and bad for gold. Now we get the latest trade deficit numbers and of course it is all great news
for the US dollar ... that 0.3 drop really does boost my confidence. Yet if one bothers to read a bit further than the
headlines you find that even with this drop in the trade deficit we are still running a deficit that is at $768billion on
an annual basis, which will exceed last years $716billion as a record high trade deficit ... WOW, lets celebrate that!
Another misrepresented number was the average cost of oil imports for June. Our government reports the USA paid
an average of $62.04 per barrel of crude, yet if you look at a chart the price of crude in June never went below $65
and in fact was closer to $70. What would be the benefit of under reporting costs for crude oil?
Perhaps the deficit would be higher than it is being reported? Would our government stoop to such tactics as
falsifying reports? Of course this is all the fault of China according to the politicians. They say the Chinese dollar
(Yuan)is too low. Does that mean the US Dollar is too high?

There is little to be joyous about in the latest trade deficit numbers, but someone thinks there is judging by how the
US Dollar Index has rallied! Obviously manipulated ...