Punxsutawney Phil saw his shadow today and got spooked, predicting six more weeks of winter. Investors got spooked by some shadows today too; the shadows of continued economic annihilation that predict many more months of stock market declines.Aren't my segues totally awesome? I continue to amaze myself with my ability to link totally random news items and literary allusions to financial market action.
Consumer spending is down for the sixth month in a row.
Bank lending standards tightened severely in the last quarter.
U.S. manufacturing activity continues to slip.
Gold continues to react to all of this macroeconomic weakness by doing the opposite of what it should be doing. It fell by over two percent from Friday. Check out this chart for IAU:
What gives? Maybe there's some truth to GATA's thesis that central banks suppress the price of gold to support the financial markets. That can't last forever.
Nota bene: Anthony J. Alfidi is long IAU and GDX (with covered calls).
