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>Gold Poised for Higher Weekly Closeby Peter A. Grant
Nov 09, AM 
Gold is modestly higher as the week winds down, and appears poised for its first weekly higher close in five weeks after bouncing smartly from in front of the 100-day moving average.The outside week (lower low, higher high) is also seen as a generally favorable technical event.Gold is maintaining gains above the $1700 level, despite fresh nine-week highs in the dollar index above 81.00. Gold also seems to have decoupled from the US stock market, which has been under significant pressure this week. It would seem gold is reverting to its more traditional role as a safe-haven asset. While activity in the dollar index is more about euro weakness than actual dollar strength, it may still be a short-term limiting factor on the upside for the yellow metal. The recent inverse correlation between the dollar and gold is undoubtedly triggering computer generated sell orders in the gold market, but seasonal pressures and investors' desire for a true safe-haven seem to be overwhelming this shorting. With the distraction of the US election now behind us, it is dawning on investors that nothing really has changed. Focus has shifted to the 'fiscal cliff' and a looming debt ceiling debate, all of which pose risks for another downgrade to US sovereign debt. A new report by the CBO says that failure to address the 'fiscal cliff' specifically would drive the US back into recession in 2013, sending the unemployment rate back above 9% by next fall. Meanwhile, the situation is Europe is deteriorating once again, as it becomes evident that the latest measures to mitigate the EU debt crisis accomplished nothing more than buying a little time. While Greece's coalition government succeeded in passing new austerity measures this week, there is still little hope that they will hit their troika mandated targets. "This is a developed world in crisis. It's the US, it's Europe, it's Japan," said former ECB chief Jean-Claude Trichet this morning on Bloomberg. He went on to add that the euro and the ECB are "credible," but stressed that central banks cant substitute for governments. Yet in the absence sound fiscal policy, may simply not have any choice, if they are to fulfill their mandates; up to the point where monetary policy alone simply doesn't work any more and that central bank credibility crumbles. Peter Grant is USAGOLD's resident economist and a well-known analyst globally in the forex and precious metals markets. NEWSLETTER SIGN-UP 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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Saturday November 10
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