Traders get encouraged by today's price action.
File this under the category of just flat-out weird.
For months – years, really – every market participant and their mother has been obsessing over when and how the Fed will finally taper. Now, with two straight months of better-than-expected jobs reports, the likelihood of that actually happening has never been closer. So why is gold, which is the market’s proxy for tapering fear, rallying?
“With the US labor market recovery gaining momentum, the hope for stronger global growth in 2014 is motivating investors to take on risk,” said Kathy Lien, managing director of FX Strategy at BK Asset Management. In good times, traders often take on more risk by selling “safe” assets like the U.S. dollar and buying riskier items like stocks and gold.
But today’s move higher in gold is curious for several reasons; it comes amid a rising dollar and higher yields, two things that typically are notRead More »from Why the dreaded taper may not matter for gold