Money and Metals

A look at currencies. "The U.S. dollar's losses accelerated after the release of much weaker-than-expected manufacturing data in the Philadelphia region. The buck was down 0.6% vs. the yen at 118.23 vs. 118.92, while the euro was up 0.5% against the dollar at $1.2604 vs. $1.2532."

"The Canadian dollar jumped to a one-week high on Thursday, helped by stronger commodities and a sharply falling U.S. currency. The currency got an early boost after Statistics Canada reported a stronger-than-expected rise in wholesale trade in August from July, while higher crude oil and gold prices added to the allure of Canada's resource exports."

"But it was a weak read on a U.S. regional business conditions survey that drove the Canadian dollar's biggest move, cutting the legs out of the U.S. dollar."

"'It's more of a broad-based U.S. dollar move today in terms of any price action that it is the Canadian dollar reacting to any specific event domestically,' said George Davis, chief technical strategist at RBC Capital Markets."

"The currency broke through the C$1.13 level for the first time in over a week, triggering automatic buy orders which drove it as high as C$1.1265, or 88.77 U.S. cents. 'Once we got through the (U.S. dollar) overnight lows at C$1.1330, there were just stops everywhere,' said Tim Mazanec, senior currency strategist at Investors Bank & Trust in Boston."

"'I think it's a general U.S. dollar correction, unable to continue the momentum that it's gained over the last couple of weeks.,' he said."

"Gold futures climbed above $600 an ounce Thursday to close near a three-week high. The allure of the precious metal returned as a defensive investment in the face of strength in oil prices and weakness in the dollar. 'Gold continues to build a base after absorbing strong bouts of selling,' said Peter Grandich, editor of the Grandich Letter."

"'A close above $610 is needed to turn the market technically bullish again, and that appears to be only a question of when,' Grandich said."

"Gold for December delivery climbed $9.90 to close at $602.50 an ounce on the New York Mercantile Exchange, after rising as high as $604. The contract hadn't traded or closed above $600 since Oct. 2. December silver rose by 34 cents, or 2.9%, to end at $12.16 an ounce."

"The gold market 'may be setting itself up for a broader move,' said Jon Nadler, at bullion dealers Kitco.com. But 'if rallies are not sustained... then the overhang of available physical gold will indeed depress gold values back towards the mid-$500s before the year draws to a close. We are walking on recently cooled lava here -- the crust remains quite fragile, so walk slow we must,' Nadler said."