Based on the reaction, it seems traders moved forward their expectations that the Fed would do something sooner rather than later because of the concern for contagion from Europe.
So, with the economy improving and the Fed committed to keeping things moving forward, it looks like traders are in the process of once again discounting blue skies ahead.
As we move toward the later part of the US trading day, it would not be a surprise to see the price action in this pair settle down as traders start looking forward to some very important economic announcements out of the UK tomorrow.
Comex gold futures prices are trading slightly higher Tuesday morning on some more chart backing and filling, and as traders and investors look forward to major news events this week.
Even with a bearish sentiment going forward into the next few weeks, as active traders it is prudent to tier in and tier out of trades as the landscape changes.