Looking at that monetary statistics, it is obvious that no matter
what the Fed says they have not begun their QEIII program. The Adjusted
Monetary Base — not the strictest variable for the evidence of QE I
will grant — stubbornly continues to oscillate around the $2.6 billion
level, which, along with Euro strength right now is seeing some
liquidation of Gold at these levels. Of course, physical buyers
continue to scoop up metal at the margins and while this game of tug of
war between the Euro and the Dollar continues, the Chinese, Russians,
Indians and virtually everyone else are buying physical gold as fast as
it can be refined.
At this point for bulls, they are going to have to watch the $1672
low from a few weeks' back. Not only is that an important technical
level in the long-term price progression of Gold, it is also a
medium-term momentum signal. Right now the bears have the momentum —
and nearly unlimited funds from the Fed to create it — and a lot of
people are simply refusing to stand in the way. This is what the Fed
wants and this is what it going to get. Between this pressure and the
need to book profits before year end and the inevitable tax hike in the
U.S. there is ample cover to keep the price in check for a few more
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This opening in December is eerily similar to last year's which saw a
completely counter-intuitive sell-off to $1525 on the 12th. Let's see
how much of a sense of humor those that run these markets have.
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