SPY

In the March 31st 2010 commentary, we’ve analyzed the general stock market along with the price of gold, and one of the things that we wrote was that a significant decline is not very likely at this point and the general market could rally further…..

…In one of our previous essays we mentioned that the situation in the USD Index appears bearish, but it has not been the main driver of the PM prices lately. It’s been the general stock market that used to drive gold and silver prices lately, which means that the situation is now less than perfectly bullish, especially in the short term….

Summing up, gold, silver, and PM stocks are currently following the general stock market more closely than they follow the USD Index. This is a positive factor in the very-short-term, as it provides additional positive signals for short-term Speculators.