Is Gold Setting Up?
After
yesterday’s reversal, the morning rally in stock index futures was
derailed today after Secretary of State Colin Powell told a Senate panel that an
apparent statement from Osama bin Laden links the terrorist leader to Iraq. A
tape was later broadcast on al-Jazeera television in which bin Laden said that
“the devil (United States) is going to be overcome and defeated.”
However prices were supported by Fed Chairman Greenspan’s comments that the
Iraqi situation is an “uncertainty that’s creating formidable barriers to
new investment.” He also said that “we should be able to tell far
better whether we are dealing with a business sector and an economy poised to
grow more rapidly — our more probable expectations.” At the close, the
March Dow futures
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fell 6 to 830, and the March Nasdaq futures
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972.
The dollar index ended higher for the
third straight session but gave back much of their gains after Powell’s
announcement. The March dollar index gained 0.14 to 100.62 and rose to $1.0718
basis the March Euro.
As long as the potential for war
continue to increase, both stocks and the dollar will be under pressure.
Treasury futures turned around after
stock futures declined. The 10-year contract
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12/32 and the 30-year contract
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contracts appear to be in symmetrical triangle formations.
Crude oil jumped to another two-year
high today as Iraq rejected to having U.N. peacekeepers during weapons
inspections. March crude
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Despite the bin Laden tape and Iraq’s
refusal to allow peacekeepers at inspections, gold fell for the fourth straight
session. April gold
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support at its 38.2% retracement, 361.79.