It used to be common knowledge that bonds only cared about the Fed. So where did that trade go so wrong?» Read More
There are gold bears, gold bulls, and gold bugs. And then there's Ron Paul.
The former congressman and presidential candidate is known for favoring gold, and he still believes it will go higher. How much higher?
"Eventually, if we're not carefully, it will go to infinity, because the dollar will collapse totally," Paul said on CNBC.com's "Futures Now."
A gold price of "infinity" might be hard to conceptualize, but Paul's point is actually quite simple.
He believes that "as long as we have excessive spending, and excessive computerized money, we are going to see gold go up," because the value of the dollar will be driven down. As each dollar becomes less valuable, it takes more of them to purchase an ounce of gold, meaning that the gold price measured in dollars rises.
Paul then takes it one step further. If Washington spending and Federal Reserve easing he refers to ends up toppling the U.S. economy and makes the dollar worthless, then no amount of dollars will allow an individual to purchase an ounce of gold. In that nightmare scenario, the price of gold (or anything else) in dollar terms is technically "infinity."
Because of these larger forces undergirding his gold thesis, the unkind short-term action in gold doesn't worry Paul.
Natural gas had a huge Monday, rising nearly 4 percent. So will it get back above $4 anytime soon?
We traded to a three-month low on Friday, and have now found some solid support. We've only started the summer, when demand increases.
Crude oil is rising to a nine-month high on Monday. So what's next?
Several developments have recently provided a tailwind to crude prices, even in the face of the ongoing bearish story for oil, which has been the tremendous amount of supply.
Unrest in Syria has reminded markets that there is always the threat of the sort of headline risk that can make shorts very uncomfortable.
(Read More: Oil Hits 9-Month High As Syria Tensions Escalate)
The "Big Boys" are cutting their gold positions—so should you?
Hedge funds reduced their net long positions in gold by 4.1 percent, according to the Commodity Futures Trading Commission's weekly Commitments of Traders report. The continued banter about the tapering of quantitative easing has led investors to bet that interest rates and the dollar will both rise, reducing gold's appeal at these levels.
Gold continued to consolidate during early Monday trading, stalling out with a high of $1,391.40. Support comes in at $1,380 to $1,383, as the market has stayed just above here, putting in a low of $1,384.10.
It was the market move that everyone seemed to be expecting: the correction that the S&P 500 has suffered over the past month.
After being presaged for months by technicians, portfolio managers and traders alike, the market's uptrend finally broke on May 22. On that day, the S&P rose above 1685 to a record high, before reversing on concerns that the Federal Reserve would soon roll back quantitative easing.
Within two weeks, the S&P dropped to 1598 before recovering. So were those 5 percentage points the entirety of the correction that so many were fretting over for so long?
"We've had a correction that, peak to trough, was very shallow," Leuthold CIO Doug Ramsey said on Thursday's installment of CNBC's "Futures Now." "But what's been encouraging is just the fear I've seen on many of the sentiment data points that I track, all of which have taken some heavy damage considering how shallow this pullback has been."
Gold remains confused under $1,400. Is it a currency or safe haven? Whatever your philosophical view of the yellow metal, you have to use the technicals to trade it.
Gold retreated in early Friday trading after rallying into Thursday's electronic close, when it tested the $1,388 pivot level on the upside.
Thursday's low was $1,373, just higher than Wednesday's early low of $1,372. A higher low will help support this market's attempt to consolidate back towards $1,396. However, a violation of this level, and furthermore a close below, will lead to a much lower trade—at a minimum, a test of the $1,364 support level. A close back above $1,380 to $1,383 will help neutralize this market going into the weekend. However, only a close back above $1388.40 to $1390 will help ignite a trade higher.
I have spoken to several hedge fund traders with a billion or more in assets under management, and they have reduced their gold holdings by 2 percent to 6 percent, while increasing stock exposure. This is important, because physical demand alone will not bring gold to all-time highs—the big players must step back in the market.
It's been a tough month for natural gas. The futures have suffered a ten percent drop in two weeks, as inventories of the commodity have soared.
On Wednesday, nat gas hit a three-month low in the overnight session, before quickly recovering, for a 1.4 percent rally as of noon.
Summer does tend to be a better month than spring for natural gas, because nat gas is used to heat and cool homes—activities that are far more popular in the summer and winter than in the spring and fall.
If the S&P closes above 1650, we will retest yearly highs.
Equities suffered an extremely choppy day on Tuesday, as the rally in the Japanese yen caused late selling. I still feel that this a "buy the dip" market, but there are reasons to be cautious.
The S&P stalled on Tuesday against resistance at the 1639 to 1642 level, which coincidentally was a lower high in the session compared to the reopen overnight. With a rally that failed at 1639.75, many of the indexes touched the unchanged level before running out of gas. The breakdown late into the close didn't lead to a new low, but solid data out of Europe on Wednesday morning has helped keep the S&P in a range.
(Read More: Futures Climb After S&P 500 Slumps 1%)
The market is now back above the major momentum pivot of 1631 to 1633. MSCI cut Greece from developed nation to emerging market status, but the market has shrugged this off, and may still be concentrating on the positive news on the US credit status that came out Tuesday but failed to attract many headlines. The fact is that S&P upgrading the U.S. sovereign debt rating to "stable" from "negative" should be more positive for the market than many have made it out to be.
Every man has a day on which he turns a new leaf. For Peter Schiff, that day has not yet arrived.
This year, "gold can certainly make a move up to $1,700 or $1,800, but I think ultimately it's going a lot higher than that," Schiff said Tuesday on CNBC's "Futures Now."
In fact, the gold bull not only remains bullish—he remains extremely bullish.
"When the world figures out the position that we're in, gold is going to the moon," said Schiff, CEO of Euro Pacific Capital.
Not in the least.
"The Fed has no exit strategy," Schiff said. "It's all fluff. There is no taper, because taper is impossible without collapsing the economy, the banks, and the U.S. government."
(Read More: The Fed Taper: Reasons for Comfort)
In fact, he added, "what we're probably going to have to get from the Fed is more QE. They're going to have to print even more money and buy even more bonds to prevent this market from imploding, and that is extremely bullish for the price of gold."
People have blamed gold's 18 percent decline this year on many different factors: a lack of fear in the market, a bubble that has burst, talk that the Federal Reserve will soon end qualitative easing. But some market participants say the single biggest factor could be the Japanese yen.
"It is difficult to deny the strong correlation between the yen's decline and the consequent collapse in gold," said Jim Iuorio, TJM Institutional Services managing director and contributor to CNBC.com's "Futures Now."
"As in comedy, timing is everything, and the announcement of drastic liquidity in measures in Japan, coinciding with massive long positions in the gold market, led to the exaggerated downward move in gold."
As the Bank of Japan's easing policy has led the yen to decline in value, the U.S. dollar has gained relative value. And a stronger dollar logically means that people are willing to pony up fewer of those dollars for gold, so gold prices should drop.
The trade seemed to have turned around last week, when the yen surged in value. But that wasn't enough for gold to make a serious run, even in the short term.
"At this point, even a stabilizing yen may not be enough to stop the negativity surrounding the gold market," Iuorio said. "When the catalyst disappears, it doesn't always mean that sentiment will revert back."
Worse, the yen's recent strength turned back around on Monday, ahead of Tuesday's Bank of Japan meeting announcement, which some think will lead to more yen weakness.
"In the last week or two, the markets have been disappointed by what dollar/yen has done," said Todd Gordon, founder of TradingAnalysis.com. "But I bought dollar/yen, because I think the Bank of Japan is scheduled to do something on asset purchases to reignite confidence."
(Read More: Dollar-Yen Shake-Out Could Just Be the Start)
In the longer term, Gordon believes that increasing U.S.Treasury yields will drive dollar/yen higher. He says a spike in yields would be good for gold if it reflected inflation fears. But since this move is due to expectations that the Fed will roll down bond purchases, Gordon says it will offer no help to the gold trade.
"This is an inflation-less recovery, and that leaves gold behind," Gordon said.
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