On Thursday the Fast Money pros were closely watching the action in gold , after Ben Bernankeconcluded scheduled comments before Congress.
Chatter on the floor had suggested that Bernanke would hint at the potential of further monetary easing strategies, a catalyst that would benefit the yellow metal. But Bernanke’s commentary was more bullish on the economy than expected, making the potential of QE3 less likely.
In turn, Bernanke’s relatively favorable outlook suggests that the US dollar should remain strong – and that calls into question the most recent move higher in gold which tends to trade inversely to the US dollar.
But is Bernanke’s rosy disposition a sign to run out and short the precious metal?
According to top trader Steve Grasso, the short answer is no. He says gains in gold may have nothing to do with Bernanke. “If moves higher in gold were a bet on QE3 – crude oil would have also spiked – but it didn’t.
Instead, Grasso says he’s hearing that “gains in gold are much more about fiat currencies around the globe and concerns about fiscal policies.”
In other words, Grasso thinks investor worries about the health of the euro, the weaker yen and other other issues should put a floor under gold.
Trader Steve Cortes is on the other side, at least somewhat. He thinks general economic weakness world wide calls the recent rally into question. “If gold backs up then I think risk assets are over extended,” he says. “I would start fighting bulls.”
What do you think? We want to know!
On a related note, Trader Brian Kelly is focused on another metal – copper . “Copper prices are very weak; copper isn’t leading the market higher and that concerns me, a bit.”
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Trader disclosure: On Feb 2, 2011, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders; J. Najarian is long CME; J. Najarian is long CBOE; J. Najarian is long CIGX; J. Najarian is long APPL calls spreads ; J. Najarian is long RIMM calls spreads; J. Najarian is long GS calls spreads; J. Najarian is long XLF calls spreads; J. Najarian is long CROX calls spreads; J. Najarian is long FIO calls spreads; J. Najarian is long NBR calls spreads; J. Najarian is long RRC calls spreads; J. Najarian is long WLT calls spreads; J. Najarian is long RSE calls spreads; J. Najarian is long GGP calls spreads; J. Najarian is long GDX calls spreads; J. Najarian is long GDXJ calls spreads; Cortes is long treasuries; Cortes is long SO; Cortes is long MO; Cortes is short crude; Cortes is short CAD; Cortes is short FSLR; Grasso is long AVAV; Grasso is long ASTM; Grasso is long BA; Grasso is long D; Grasso is long LIT; Grasso is long MHY; Grasso is long MO; Grasso is long PFE; Grasso is long PRST; Grasso is long S; Grasso is long XLU
For Brian Kelly
Shelter Harbor Capital is long XLF
Shelter Harbor Capital is long KRE
Shelter Harbor Capital is long KOL
Shelter Harbor Capital is long EWZ
Shelter Harbor Capital is long copper
Shelter Harbor Capital is long GLD
Shelter Harbor Capital is long SLV
Shelter Harbor Capital is short yen
For Steve Grasso
Stuart Frankel & its partners own CSCO
Stuart Frankel & its partners own CUBA
Stuart Frankel & its partners own GERN
Stuart Frankel & its partners own HPQ
Stuart Frankel & its partners own HSPO
Stuart Frankel & its partners own MU
Stuart Frankel & its partners own NYX
Stuart Frankel & its partners own PRST
Stuart Frankel & its partners own XRX
Stuart Frankel & its partners own ZNGA
For Arvind Bhatia
(ZNGA) Sterne, Agee & Leach, Inc. makes a market in the shares of the subject company
CNBC.com with wires.