As the current FOMC meeting kicks off today we have investors waiting to hear if the Federal Reserve will be staying its course and continue its current round of tapering. It is our current belief that the FOMC meeting will be a nonevent it terms of the overall effect it has on the markets

The unrest in Iraq seems not to be enough of a motivator for gold traders to grow more bullish.

However, it is not irrational. The U.S. manufacturing report rose a very solid 0.6% in May, and the New York region's (Empire State) index of manufacturing rose to a very impressive 19.3 beating all estimates, which range from the 12 to 15 range.

Six weeks ago, the crisis in Ukraine was driving gold higher until cooler heads prevailed. The last few days, Iraq has been the driving force behind a dramatic price in gold, with some analysts predicting a price of $1300 in the near to middle term.

Six weeks ago, the crisis in Ukraine was driving gold higher until cooler heads prevailed. The last few days, Iraq has been the driving force behind a dramatic price in gold, with some analysts predicting a price of $1300 in the near to middle term.

The sweep across northern Iraq by radical Islamists seems to have caught Iraq, the U.S. and its allies off guard and has thrown an element of uncertainty into world affairs.

Gold took advantage of the conditions and zoomed up more than 1%, although it has since fallen back.

The U.S. budget deficit took another bounce down in May, and, of all the leading indicators, that one is crucial.

Why?

Because the whittling away at the federal government's deficit expresses increased tax revenues more than cuts to spending. That means more people are working, more people are buying. More people are active in the economy.

Some influences are temporal.

The president of the St. Louis Fed, James Bullard said that the American economy is nearing normal and a return to business-as-usual monetary policy is in the offing. Essentially, he's calling for higher interest rates sooner, rather than later.

Bullard claims that inflation (even by the standards of government statistics), is nearing the Fed-set target.

Before we start, a word about D-Day, June 6, 1944.

The western allies who landed on the beaches of Normandy helped to save the world from the worst modern menace it has known. Let's remember their courage and sacrifices and remind ourselves we live in a world of their making and not in some Nazi nightmare.

Today's bounce caught many gold bulls off guard. But, when you ponder that the European Central Bank took bolder-than-usual moves - very unexpected given their track record of under-delivering on big promises - traders could only react as quickly as possible.