Thursday November 07, 2013 07:41
The market is priming itself for a move upon the release of the ECB rate policy decision today and the employment report tomorrow in the US. The first reaction to each release will be a kneejerk, followed by a pause and then the trend emerging upon closer examination of the minutia of the data. For example, lower rates in the ECB would suggest a stronger dollar and a negative bias for gold. However, talking heads may argue, that lowering rates indicates a deep concern of the financial health if the Euro zone and as such metals benefit as a safe haven play. Be careful who you listen to - make sure they are not talking their book. A long trader will argue the latter and a short book will argue that a stronger dollar is negative for metals. Let the noise abate. Should a trend emerge, it’s always better to be on the second rail car, the first always receives the most damage if you’re wrong.