U.S. stock futures and commodities (including precious metals) across the board are trading lower this morning. Peter Cardillo of Rockwell Global Capital said, “I think it’s just a normal pullback  on weaker commodity prices due after a long run-up (in stocks). Housing data could cushion a U.S. decline, but stocks are likely to take a breather for a day or two.” Cardillo said he also expects more upside in stocks as investors switch to riskier assets such as equities.

The housing data  isn’t likely to cushion the fall of U.S. stocks  today. The Commerce Department reported that housing starts for February fell 1.1 percent, after it revised January’s numbers slightly upward. Analysts expected a rise in housing starts, but the main increase came in permits for new construction, which typically is seen as a gauge of future demand. Housing data is viewed as a key indicator of a country’s economic condition. Precious metals prices were largely unaffected by the news.

Historically, the Gold price has held a mostly positive correlation with oil prices. Oil prices have been on the rise lately amid tensions between Iran and the West, and the chief executive of Shell said he believes  that trend will continue. Peter Voser said, “Longer term, you will see demand rising and … in the very long term, we will see prices going up because of high demand and as it gets more expensive to get the resources out of the ground.” He warns that higher commodity prices could hamper the economic outlook, which is something important to monitor.

At 8 a.m. (CDT), the APMEX precious metals spot prices were:

• Gold - $1,647.90 – Down $20.70.
• Silver - $32.24 – Down $0.76.

The Gold price has remained steady since the posting of the Mid-Day Gold & Silver Market Report, with the price for the precious metal ending today’s session in positive territory.  Rohit Savant, an analyst with CPM Group in New York, said, “A lot of it has to do with bargain hunting.” Rohit said lower prices are enticing investors back to Gold. Prices for Silver, Platinum, and Palladium stayed steady in afternoon trading, with all three prices ending the day higher.

The current optimism over the stock market could dissipate soon as 2012 heads into an earnings season that some say looks to be the worst since the 2008 financial meltdown.  According to projections from Standard & Poor's/Capital IQ, first-quarter earnings growth is on track to be at a low 0.5 percent. Because this follows last year’s middle-of-the-road fourth quarter, there are no indications of potential big earnings to be had, as there were after the worst of the 2008 crisis. “Earnings are going to be far slower than they’ve been. There’s almost no way by the laws of physical science that they can’t be,” said Jim Paulsen, chief market strategist at Wells Capital Management. The effect that earnings season will have on the stock market’s bull run is uncertain, but the concern is that even psychological fears could be enough to trip up the market’s current stride.

At 4 p.m. (CDT), the APMEX precious metals spot prices were:

• Gold - $1,665.40 – Up $8.10.
• Silver - $32.98 - Up $0.34.

U.S. stock futures are heading lower  this morning, as precious metals prices remain steady. Investors have experienced some strong gains in the past several weeks, and it could be they need to take a breather.

Bill Gross, chief executive of PIMCO, the world’s largest bond fund, is forecasting for 2012 another round or two of  quantitative easing, muted economic growth and the end of a 30-year bull run in government bonds. Gross points out that long-term interest rates have been rising in recent weeks as a result of increased concerns about inflation and the ending of Operation Twist in several months. Inflation is seen in rising oil and commodity prices. The Consumer price Index has risen 2.9 percent in the past 12 months. Operation Twist was a Fed plan where short-term debt was sold to buy long-term debt. The question on Gross’ mind is that when the Fed quits propping up long-term debt, who will be left to buy?

The New York Mercantile Exchange weekly oil chart has developed a technical pattern (head and shoulders) that would indicate  oil prices will continue to rise. The next price target is set at $125.

At 8 a.m. (CDT), the APMEX precious metals spot prices were:

• Gold - $1,658.40 – Up $1.10.
• Silver - $32.56 – Down $0.08.

Precious metals prices remained relatively steady in afternoon trading. Technical selling to balance portfolios after a week of rising oil prices, the dollar’s decline in value and better than expected consumer prices  pushed investors towards selling  their positions to cover shortcomings throughout the week. These concerns and issues generally tend to point towards inflationary concerns. Treasury Secretary Timothy Geithner said, “We still face a dangerous and uncertain world” when it comes to oil prices, because there is not an easy fix to solving the gasoline issue for domestic consumers.

Saudi Arabia is looking to become a resource that the U.S. will turn to in terms of covering any potential oil shortage in production from the U.S. There seems to be concern over a seasonal impact to production that is contributing to U.S. shortcomings with oil production facilities in the Gulf of Mexico just starting to come on-line following the winter season. Saudi oil production has been on the rise with two key refineries boosting their production to cover global concerns. The Iranian stand-off has pushed some Middle East countries to push Saudi Arabia to increase oil prices, but  Saudi Arabia is standing beside the U.S.  According to Amy Jaffe, energy policy expert for Rice University, “Beyond the expansion at Motiva, there has been a major public shift by the Saudis since the Iran tensions started to raise the price of oil… Saudi Arabia and the United States are trying to show the Iranians they (the Iranians) will have little flexibility, and they shouldn't count on the world needing all the oil that Iran produces.”

At 4:15 p.m. (CDT) – the APMEX precious metals spot prices were:

• Gold - $1,662.00 – Up $1.00.
• Silver - $32.63 – Down $0.14.

The Gold price was still down at midday trading on a one-two punch of increased duties on bullion in India and continued upbeat U.S. economic data. India’s Finance Minister Pranab Mukherjee  unveiled India’s 2012-13 budget today, which called for an increase in taxes on Gold. This would mark the second time India has increased taxes on precious metals imports this year. Mukherjee indicated that India’s current account deficit is linked to the nearly 50 percent increase in precious metals imports. India has been a cornerstone of the bullion market, importing a record 969 metric tons last year alone. Climbing Treasury yields and the continued increase in the strength of the dollar also are  adding to the downward pressure on Gold. Increasingly positive data indicates the U.S. economy may be healthier than expected.

Oil has moved back above $124 a barrel in response to  restricted Iranian imports  and reduced capacity. “Spare capacity is really very tight, and any natural disaster or problem in the Middle East could be a real problem,” said Rob Montefusco at Sucden Financial. The tight rules on Iran are even disrupting oil shipments to Asia, and many Eastern oil purchasers are calling on Western officials to revise sanctions. Any news on economic sanctions is viewed as isolating Iran, but domestically the rising prices at the gas pump continue to be of great concern to U.S. consumers. The rising gasoline prices could derail any good economic news or recovery.

German Chancellor Angela Merkel has said that a  decision on reinforcing the firewall  that is the euro area’s financial backstop will be made by the International Monetary Fund in a meeting next month. Merkel has indicated there are discussions about “combination possibilities” for the rescue funds ahead of the meeting in Copenhagen. There are concerns among finance ministers on what to do with the temporary European Financial Stability Facility, which manages rescue programs for Ireland, Portugal and Greece, and its permanent successor, the European Stability Mechanism. “What’s clear is that we need to settle on a position with a view to the IMF’s spring meeting, because the topic will surely come up, and because there have been offers by the international community” to boost the IMF’s anti-crisis resources, Merkel told reporters in Munich today. “You can count on us setting the course by the end of March.”

At noon (CDT), the APMEX precious metals spot prices were:

• Gold - $1,656.40 – Down $4.60.
• Silver - $32.63 – Down $0.14.

Precious metals prices moved lower in overnight trading, and remained so  after the latest consumer price index (CPI) report was released. Forecasters expected the CPI would rise about 0.5 percent, and the number came in at 0.4 percent. Core CPI (which strips out food and energy costs) rose just 0.1 percent. U.S. stock futures added to gains after the release. Much of the movement in the Gold price lately has been a result of the Federal Reserve meeting this past Tuesday.

Geopolitical tension remains a key concern around the world. In Syria,  45 more residents were killed  as government forces pressed an offensive that also drove more than 1,000 refugees into Turkey. North Korea announced  it will launch a rocket carrying a satellite next month, raising concerns from the United States and other nations. U.S. Secretary of State Hillary Clinton said she believes such a launch would breach a U.N. resolution. Experts suggested this launch will be another long-range missile test, which the country claimed it would halt as part of ongoing talks with the U.S.

An CNBC article is asking this question: “Who is doing all the buying in the stock market?” The author points out that metrics used to gauge behavior by investors point toward money leaving the market, with those involved unsure of what the future holds. Charles Biderman, chief executive at TrimTabs, said, “Demographics and poor longer-term stock market returns probably play a role (in investor caution). But we also think that all the volatility and central bank interventions in financial markets are leading more investors to question how stable the financial system really is.” One investment that historically has played a role of stability in an otherwise-unstable financial market is Gold, and it also has performed well when central banks intervene in the market.

At 8 a.m. (CDT), the APMEX precious metals spot prices were:

• Gold - $1,647.50 – Down $13.50.
• Silver - $32.46 – Down $0.31.