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NEW in the last 5 minutes www.usagold.com --LIVE NEWS--
Yuan continues record run against dollar	20:43 China Daily - BizChina
5 to 10 minutes old www.usagold.com --LIVE NEWS--
Inflation impact a bit exaggerated: Joseph Stiglitz	20:39 The Economic Times - Economy
China says Sept retail sales up 14.2%	20:39 Business Times Online - Asia
China's economic growth slows to 7.4 percent	20:38 Associated Press - Business
Household sector emerges main debtor of M'sian economy	20:38 Asia News Network
AOFM sells Treasury notes	20:35 Business Spectator
10 to 15 minutes old www.usagold.com --LIVE NEWS--
China's retail sales up 14.1 pct in first nine months	20:33 china.org.cn - Business
15 to 30 minutes old www.usagold.com --LIVE NEWS--
Forex: AUD/USD jumps briefly after CN data	20:29 FXstreet - Forex News
China's economy slows to 7.4% in Q3	20:27 Channel NewsAsia - Business
Wen sees economy stabilizing	20:26 China Economic Review
South Africa's 'richest tribe' offers platinum model	20:26 Moneyweb - Across the Atlantic
Chinese Goldilocks GDP: Q3 Economy Goalseeked Just As Expected At 7.4%	20:16 Zero Hedge
How to Profit From a Reversal in the Dollar	20:16 The Motley Fool
Australian dollar lifts on China GDP	20:15 Business Spectator
30 minutes to 1 hour old www.usagold.com --LIVE NEWS--
China's economic growth slows to 7.4 percent but retail sales, factory output improve	20:12 Minneapolis Star Tribune - Business
China's Wen Says Economy Relatively Good in Third Quarter	20:11 CNBC.com
Aussie Dollar Ticks Higher After Chinese GDP	20:10 Business Insider - Finance
China September Retail Sales	20:08 ForexLive.com
US keen to promote Pakistan’s economic development: Dodman	20:08 The News International - Business
Gold extends gains	20:08 The News International - Business
SBP sells treasury bills worth Rs170bn	20:08 The News International - Business
Rupee declines	20:08 The News International - Business
Bank of Thailand opts for rate cut to shore up economy	20:08 Asia News Network
Euro pushes higher as yen drops	20:05 Business Spectator
METALS-London copper edges up for 3rd day; focus on China data	20:03 Reuters - Industry, Materials & Utilities
Chinese economy grows 7.4% in Q3	20:01 FT.com - China
Global economy: When China sneezes9	20:00 FT.com - Asia
Signs suggest stable Q3 growth for China economy	20:00 China Daily - BizChina
Forex Flash: If China GDP offers no downside surprise, AUD/USD has potential to kiss 1.04 - NAB	19:59 FXstreet - Forex News
China’s Stocks Rise as Wen Sees Improving Economy Before Data	19:52 Bloomberg - China
Analysis: Talk with BI: Unfaltering local economy	19:51 Jakarta Post - Business
Forex: AUD/JPY staying bid above 82.00	19:49 FXstreet - Forex News
Australian dollar stronger at noon	19:45 Business Spectator
1 to 2 hours old www.usagold.com --LIVE NEWS--
FOREX: Ringgit Continues Advance Against Dollar	19:44 Bernama - Malaysian National News Agency - Markets
Forex Flash: China Q3 GDP seen at 7.1% - Westpac	19:39 FXstreet - Forex News
Forex Flash: EUR/CHF, USD/CHF to end higher by year end - Econometer	19:39 FXstreet - Forex News
Gold Set to Decline for First Day in Three Before Chinese Data	19:38 Bloomberg - Markets - Commodities
Nikkei rides high for third day as softer yen helps exporters	19:29 Reuters - Economy
Treasury forecasts sluggish global growth	19:15 Business Spectator
Wen Says China’s Economy ‘Relatively Good’ Ahead of GDP	19:13 Bloomberg - Industries
Hartford Settles Lawyer’s Lawsuit Involving Treasury Deputy	19:13 Bloomberg - Industries
China Inc. waves a red flag on economic recovery	19:09 Asahi Shimbun - Business
South Africa's "richest tribe" offers platinum model	19:07 The Star Online
The Conference Board Leading Economic Index® (LEI) for Korea Declines	19:02 PR Newswire (Press Release) - Policy and Public Interest
Class Warfare: The Mortal Enemy Of Economic Growth And Jobs	19:01 Forbes.com - Opinion
Euro Climbs on Improving Outlook	19:00 The Wall Street Journal - Market News
Housing Data Buoy Copper	19:00 The Wall Street Journal - Market News
Housing starts surge in positive sign for US economy	18:57 The Star Online
NYMEX-Crude rests near $92 on stock build; China data eyed	18:57 Reuters - Energy
Japan Stocks Rally As Dollar Tops 80-yen Level	18:56 Fox Business - Industries

Gold Closes the Gap

by Peter A. Grant

Oct 17, AM
(from USAGOLD.com) --

Gold extended Tuesday's gains in overseas trading to close the small gap left on Monday at $1749.15/$1752.18. However, a more important Fibonacci level at $1756.61 must be negated to ease short-term pressure on the downside. This level marks 38.2% retracement of the decline from $1795.90 (05-Oct high) to $1732.32 (15-Oct low).

While gold did succeed in setting new highs for the year early in the month, the failure to take out chart resistance at $1802.89 (08-Nov-11) leaves the precious metal well contained within the range that has dominated since the latter part of last year. That range is defined by the all-time high at $1920.74 from 06-Sep-11 and the $1522.48 corrective low from 29-Dec-11. However, the long-term secular bull market remains underpinned by solid investment and sovereign demand.

There are also some supply-side risks associated with the ongoing labor unrest in South Africa, the world's fifth largest producer of gold. Additionally, with both China and Russia accumulating gold as a reserve asset, most — if not all — of the mining output from the first and fourth largest gold producers is going right to their reserves. See more detailed analysis in our latest newsletter.

The corrective tone that has recently emerged is attributable in part to rising global growth concerns, which I have covered in detail in recent DMRs and in the newsletter. Additionally, I think the narrowing of the Presidential polls is playing a role as well. Note that the recent high in the gold market came two-days after the Presidential debate in Denver, just as fresh polls reflecting Mitt Romney's performance were coming in.

Mr. Romney has stated on a number of occasions that if he were to win the election in November, he would look to replace the Fed chairman, whose term ends in in January 2014. This, along with a shift in the likelihood that Mr. Romney might get the opportunity to sack Bernanke, has created a level of uncertainty in the market. However, I don't believe that a President Romney would appoint a true monetary hawk to the post, and in fact there are some in the Romney campaign that think Bernanke should be given a third term.

Nonetheless, investors are understandably adjusting positions to account for the possibility of tighter monetary policy in a post-Bernanke Fed. Again, I wouldn't expect zero interest rate policy and other accommodations to be removed immediately if the Fed got a new chairman. More likely would be a gradual dialing-back of some of the super-accommodative policies that have emerged under Bernanke.

Obviously, if monetary accommodations are to be scaled back, there needs to be a reasonable expectation that Congress will do what is necessary on the fiscal side of the equation, lest the U.S. economy fall back into recession. Even Ben Bernanke does not believe monetary policy is the answer to all our problems. A point that he reiterated just this past weekend in Tokyo, when he said, "monetary policy is not a panacea." Interestingly, both gold and equities recently returned to levels last seen in mid-September, when QE3 was announced. That drives home the point pretty effectively as well.

Peter Grant is USAGOLD's resident economist and a well-known analyst globally in the forex and precious metals markets.

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Opinions expressed in commentary on the USAGOLD.com website do not constitute an offer to buy or sell, or the solicitation of an offer to buy or sell any precious metals product, nor should they be viewed in any way as investment advice or advice to buy, sell or hold. USAGOLD, Inc. recommends the purchase of physical precious metals for asset preservation purposes, not speculation. Utilization of these opinions for speculative purposes is neither suggested nor advised. Commentary is strictly for educational purposes, and as such USAGOLD does not warrant or guarantee the accuracy, timeliness or completeness of the information found here.

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Gold Closes the Gap