The Dow fell 80 points today on heavy volume as the US dollar rose and oil prices fell. At the close the Dow was at 17,502. Some are calling this a “bunny” market because it is up and down in small hops as of late.
Word out is that several Federal Reserve board members are pushing for a rate hike sooner rather than later and that Fed Chair Janeet Yellen might have a rebellion on her hands. This news caused the US dollar to move higher and pushed commodity prices lower.
Gold prices have bounced around recently as the shiny metal is being pulled in several directions. The attacks in Brussels caused the euro and British pound to fall hard. This indicates investors are growing wary of Europe’s ability to handle the myriad of crises it faces including a Brexit, Grexit, bank issues in Greece, Italy, Spain and Portugal, immigration issues, demonstrations and terror attacks plus the growing debate about how to handle these issues. All of this might spur some to buy gold as a hedge. Meanwhile the US dollar is strengthening which puts downside pressure on gold. Gold closed the day off $28.70 at $1,218 an ounce. The recent events in Europe have completely overshadowed the US Presidential election, President Obama’s trip to Cuba and economic news out of Asia. Investors also appear to be more interested in owning US based stocks instead of having international exposure.
The American Petroleum Institute said late Tuesday that U.S. crude inventories rose by 8.8 million barrels last week. Analysts were surprised since this was 3X the amount that oil gurus polled by Reuters were expecting. Couple this news with a strong US dollar and oil prices fell 4% and are back below $40 a barrel at $39.80.