$GOLD: http://stockcharts.com/h-sc/ui?s=$GOLD&p=D&yr=0&mn=6&dy=0&id=p67833494223

Gold climbs with ECB, U.S. fiscal cliff in focus
http://www.marketwatch.com/story/gold-recoups-but-broader-metals-sector-mixed-2012-11-08

Europe dominated the news Thursday “with the [European Central Bank] keeping accommodative policy in place and rates steady,” said Jeffrey Wright, a managing director at Global Hunter Securities. “ECB policies, much like our own, eventually lead to inflation, which support gold.”

For now, there are three near-term catalysts that should be supportive for gold, said Wright: 

1. a U.S. debt-ceiling limit by mid-December, 
2. a plan to deal with the fiscal cliff before January and 
3. the Federal Reserve meeting in December which holds the “potential to again support or extend quantitative-easing measures.”

The fiscal cliff refers to a combination of tax hikes and spending cuts that will come into effect on Jan. 1 unless politicians reach a budget deal. If an agreement can’t be reached, the U.S. economy faces roughly $400 billion in tax increases and about $200 billion in spending cuts.

Keepin the Prez: http://www.msnbc.msn.com/id/3032553/ns/politics-decision_2012/t/nbc-politics-election-news-political-issues-events/#.UJqA7MWHJ8E

http://www.policymic.com/articles/18219/electoral-college-map-live-obama-wins-reelection-senate-race-results-favor-dems

Back to beating down stocks. http://stockcharts.com/h-sc/ui?s=$SPX&p=D&st=2012-05-07&en=(today)&id=p16868806737

Components and weightings of NUGT & DUST:
http://www.amex.com/othProd/prodInf/OpPiIndComp.jsp?Product_Symbol=GDM

Top 5 = >50% of Index:

ABX: http://stockcharts.com/h-sc/ui?s=ABX&p=D&yr=2&mn=0&dy=0&id=p97391724794

GG: http://stockcharts.com/h-sc/ui?s=GG&p=D&yr=2&mn=0&dy=0&id=p62368175799

NEM: http://stockcharts.com/h-sc/ui?s=NEM&p=D&yr=2&mn=0&dy=0&id=p55369105330

AU: http://stockcharts.com/h-sc/ui?s=AU&p=D&yr=2&mn=0&dy=0&id=p17851405524

KGC: http://stockcharts.com/h-sc/ui?s=KGC&p=D&yr=2&mn=0&dy=0&id=p13026394557

NUGT: http://stockcharts.com/h-sc/ui?s=NUGT&p=D&yr=2&mn=0&dy=0&id=p87732932997

DUST: http://stockcharts.com/h-sc/ui?s=DUST&p=D&yr=2&mn=0&dy=0&id=p90147499397

$GOLD: http://stockcharts.com/h-sc/ui?s=$GOLD&p=D&yr=2&mn=0&dy=0&id=p52437883199

$USD: http://stockcharts.com/h-sc/ui?s=$USD&p=D&yr=2&mn=0&dy=0&id=p31588836308
Comp. of $USD to $GOLD:
http://stockcharts.com/h-sc/ui?s=$USD&p=D&yr=2&mn=0&dy=0&id=p66425495206

Two Days Late Posting... But That's Okay. Nothing Much Happened Since

DUST For Fun!

Worry worts around the waterhole are that PoG is going to drop in the short term only to soar as soon as Spain starts asking the EU for some cash.
PoG @ $2,000/oz. by year end is being freely bandied about.
In the meanwhile, while PoG is consolidating with nothing much to do I'm expecting a drop to the TA box between $1,550 and $1,600.




October 19, 2012 14:24
The Gold/Stock Correlation: What Is It Telling Us Now?
""The U.S. government will likely exhaust its headroom under the current debt limit within a few months and we expect the Treasury to suspend normal issuance of non-marketable debt by the end of the year. Specifically, we expect that the outstanding federal debt to reach its statutory limit around the end of this year," wrote Nomura economists in a recent research note.

This comes on top of ratings agency Moody's recent warning that they could downgrade U.S. debt before year-end if no deal is struck to address long-term debt and fiscal issues. What does this all mean for gold? Even if stocks sell-off later this year, if the Washington policy makers fail to quickly and adequately address the U.S. debt ceiling and come to agreement on a long-term debt deal, gold could likely once again decouple from stocks and surge higher."

October 20, 2012 03:56 GMT
Gold Correction Gathers Pace- $1693 in Focus Ahead of FOMC
"The European Summit which began on Thursday offered no clarity as to the steps policy makers will take to address the ongoing crisis that has gripped the region for nearly three years. In fact, German Chancellor Angela Merkel prepped markets, stating that she expects no decisions to be taken this week as policy makers lay the ground work for the December meeting where they will discuss steps towards further economic, monetary and financial integration among the member states.

Looking ahead to next week, gold traders will be taking cues from the FOMC interest rate decision on Wednesday and 3Q GDP data on Friday. Although the central bank is not expected to alter its policy stance, investors will be closely eyeing the accompanying statement for an updated assessment of the domestic economy. With headline CPI data this week coming in above expectations at 2.0% y/y, traders will be closely eying the statement’s language as it pertains to inflation. The Fed has remained unwavering with its expectations for price growth with the September statement citing that, “Inflation has been subdued, although the prices of some key commodities have increased recently,” and that, “Longer-term inflation expectations have remained stable.” Should the statement cite added concerns about rising prices, look for gold to remain well supported as investors flock into bullion as a traditional hedge against inflationary pressures. On the other hand, if there’s no change, gold is likely to continue to track risks as gains in the greenback weigh on precious metal."


October 22, 2012 8:05 AM
Gold Firmer on Light Short Covering and Bargain Hunting
"In overnight news, European stock markets were firmer along with the Euro currency amid Spanish elections that showed the ruling conservative party doing well. Such bolstered notions Spain will be seeking EU financial assistance in the near term. There was some disappointing economic news from Japan that suggests the Bank of Japan will implement fresh monetary stimulus measures soon. Otherwise, it was a quiet start to the new trading week in Asia and Europe. Tensions in the Middle East are ratcheting a bit higher following fresh violence in Lebanon. Focus of the market place this week will be on Monday night’s U.S. presidential debate and on the latest meeting of the U.S. Federal Reserve’s FOMC, which begins Tuesday."

Gold May be Bouncing Off a TA Double Top First Bottom

Budget cuts are different than asking for more money, which Spain has yet to ask from the ECB. Both look like good reasons for gold to increase.

Gold touched the 20EMA yesterday after several days of worrying if Spain would ask for more money or not, then continued rising Thursday after a delayed announcement of budget cuts.

However, an announcement of plans and an actual enactment of them are two different things. Expect another round of Greece-like argument between Spanish executive and legislative branches resulting in another drop in the PoG before it does resume an upward climb when actual enactment does come + inflationary ECB monies are requested.

If Moody's does downgrade Spanish debt the euro should drop, USD should rise, and gold should... I dunno.

SEP 27 @ 1440: PRECIOUS METALS: Gold Rebounds on Spain Hopes
"Gold futures settled at their highest price in more than six months in New York, while physical gold traded in euros in London hit a record high after Spain announced deep spending cuts in its new budget, fanning investor hopes that it will soon seek rescue financing.

Spain announced a severe round of budget cuts and reforms aimed at convincing international creditors and investors that it is on track to meet its deficit reduction targets. Overall spending will be cut by 40 billion euros ($51 billion) as Madrid aims to cut the country's deficit to 4.5% of gross domestic product* next year."

* Compare to U.S. deficit of 90% of GDP for past 2yrs and likely for the next 5yrs.


SEP 28 @ 0222: Forex Flash: Spain to receive downgrade to junk status? – Westpac
"In addition, there is some chatter about Moody's downgrading Spain to 'junk' rating of Ba1, given that when it cut Spain three notches on 13 June, Moody’s began a three month ratings watch for a further downgrade. “However, the agency said it was waiting for the outcome of the audit of Spanish banks so presumably it would be no earlier than the latter stages of the American session – though of course given the initial response to the Spanish budget, Moody’s may well maintain the rating and switch to a stable outlook.” Callow suggests."


SEP 28 @ 0313 ET: Gold hits one-week high as Spain, oil support
"Bullion is used as a hedge against higher inflation outlook triggered by easy monetary policy.

Spain's budget plan set the stage for a bailout request, bringing relief to investors skittish over Madrid's finances and euro zone's ability to contain its debt crisis. The euro firmed against the dollar after the news, boosting commodities priced in the greenback.

Though some have warned about the high speculative interest in gold in recent weeks and a potential sharp pullback as a result, the medium to long-term outlook for the precious metal remains rosy.

"There is definitely no reason for gold to go back to $1,500 level," said Yuichi Ikemizu, head of commodity trading, Japan, Standard Bank. "I don't see gold going on a spectacular rally right now, but towards the end of year it is likely to hit $1,900 level."" 


SEP 29 @ 0602: Gold leads fourth quarter’s likely winners
"“As governments print more and more money, all commodities are rising in price as measured in those currencies,” said James West, portfolio adviser to the Midas Letter Opportunity Fund. “The more money printed, the less investors are going to value paper assets and the more they will seek to hold the real assets — commodities.”

The European Central Bank, U.S. Federal Reserve and Bank of Japan have all announced bond-buying plans in recent weeks, a move which tends to devalue the currencies of the countries undertaking them and adds to the appeal of dollar-denominated commodities.

“Gold has a new demand engine underneath it again, with both the ECB and the Fed printing money on an unlimited basis,” said West. “The looming fiscal cliff of the budget cuts combined with the debt ceiling is also likely to drive investors to gold and silver.”"



SEP 28 @ 0622: Markets await Moody's review of Spanish debt
"The Moody's Investors Service review of Spanish sovereign debt could come as soon as the close of Europe or U.S. markets Friday, say analysts. Moody's said in August its review on Spain's Baa3 rating would continue through the end of September, which is this Sunday. At the time it also said it was waiting on more information on recapitalization needs of Spanish banks, which is coming at 6 p.m. Central European Time (12 noon, U.S.Eastern time) on Friday. A move below Baa3 would drop Spain debt into junk. Analysts at RBS said they expect Moody's to extend its decision until Spain makes a bailout decision. "We expect Moody's to downgrade Spain to junk on any request for a full bailout," they said in a note. Analysts at Commerzbank said expect a later Friday move, saying there should be no downgrade to junk unless the bank recapitalization needs announced later are above €60 billion ($78 billion). "A negative assessment due to the government's reluctance to succumb to European Stability Mechanism conditions is possible, but everything considered, it is a close call with the odds slightly in favor of a rating affirmation now," the analysts said."



SEP 28 @ 1236: U.S. stocks pare losses after Spanish bank news
"Results from Spain’s bank stress test show that banks are mostly solvent and viable and need 60 billion euros ($77 billion) in capital, in line with expectations.

“Stocks celebrated the uncertainty over the Spanish bank stress test, rebounding strongly off their lows,” said Keith Springer, president of Springer Financial Advisors in Sacramento, Calif. Although the banks’s shortfall in capital “is no picnic, it is far better than the worst estimates and what the market feared.”"



SEP 28 @ 1236: Spain banks will need around €60billion in capital
"The recapitalization needs of Spanish banks amounted to €59.3 billion ($76.3 billion), according to results of independent stress tests the Bank of Spain and the Economics Ministry announced Friday. The results came in line with analysts expectations. Recapitalization needs falls to €53.75 billion, when taking into account mergers in progress and tax effects, they said. "The results confirm that the Spanish banking sector is mostly solvent and viable, even in an extremely adverse and highly unlikely macroeconomic setting," said the joint press release."

EU + China + Worry = $USD > $GOLD

SEP 26 @ 0401: Spain's Chicken and Egg Game won't end Happily
"There is a real risk that is precisely what we will see played out in Spain over the next month. Rajoy assumes the bond markets will back down, and the bond markets assume that the Spanish prime minister will back down. And both sides end up in a nasty collision.
If it happens, it won’t be pretty. One of the main ratings agencies could downgrade Spanish debt to junk. Money might start to flee Spanish banks. Bond yields might start to spiral uncontrollably upward. Even if the ECB does intervene, by them it may be too late to prevent a meltdown.
Mario Draghi has laid out a plan to rescue Spain. But it still needs Mariano Rajoy to make the call. And it would be rash to assume that it will actually happen — or that it will happen soon enough to prevent the collision."

SEP 26 @ 0918: China stocks touch 3-year low in downbeat Asia
"“It appears as though the impact of recent [U.S.]central bank announcements is fading fast to be replaced by renewed global growth fears and yet more concerns about the lack of traction in delivering solutions to the fiscal crisis in Europe,” said Mitul Kotecha, strategist at Credit Agricole."

SEP 26 @ 0952: Oil drops more than 1% on Europe worries
"Oil futures dropped more than 1% on Wednesday on renewed concerns about the euro zone and as traders braced for a possible increase in inventories amid worries about diminished demand for oil.

Spain’s borrowing costs surged on Wednesday. The difficulties Spain faced on international bond markets come as a second night of protests against austerity measures rocked Madrid and the region of Catalonia announced elections that could potentially lead to independence of the region, Spain’s economic cornerstone."

SEP 26 @ 1039: Gold futures tumble on Europe’s woes
"Investors turned to other safe-haven assets such as the dollar and U.S. bonds, leaving gold to behave as a commodity rather than benefit from a fear trade.

Concerns that Greece may run out of money reignited fears of a “Grexit,” while Spain’s Catalonia region called an election and protests rocked Madrid. Spain’s bond yields shot higher."

SEP 26 @ 1052: Dollar strengthens; euro hit by Spain worries
"BNP Paribas strategists said that Spain — yet to request a bailout — is front and center for currency investors this week. “Investors are likely to stay on the sidelines in anticipation of the release of the 2013 budget, reforms and the bottom-up banking sector review due out on Thursday and Friday,” said the strategists."

$GOLD off TA high.
Typically, when it drops off TA highs it punches through the 50EMA equal to the range it was above.
This gives a short-term price target of $GOLD @ ...
  $1780
- $1734
= $46

   $1734
- $46
= $1688

DUST, 3X inverse of spot gold, is off it's TA bottom.
If it follows the same pattern as $GOLD then the short-term price target of DUST is...
   $28.91
- $22.04
= $ 6.87

   $28.91
+ $ 6.87
= $35.78 or 32.3% above current position.

The Wall of Worry Continues: Everything at TA Extremes, But So What?

SEP 13: Fed To Launch QE3 Of $40 Billion MBS Each Month

NOV 6: A liberal Democratic POTUS + Congress should suggest an increased economic policy bias toward socialistic "redistribution of wealth through increased taxation", which the Bush era tax cut expiration (tax reversionist normalization) should achieve, thus devaluing the $USD = increasing the $SPX.

JAN 1: However, the mandated Fed spending cuts would strengthen the $USD = decreasing the $SPX.

Two steps forward. Two steps back. But this is in a closed system. 

Globally, Spain & Greece seem to be stonewalling ECB efforts to keep the EU on the road to recovery, plus China is exhibiting notable growth slowdowns.

Super Bear says "fuhgedaboudit."

Same Super Bear says a 20-25% SPX drop before election is possible.

Using a $VIX "low testing" approach is not always reliable. 

Sometimes the $SPX chugs right along upward when the $VIX bottoms.

Sometimes it doesn't.

Technically - the $VIX is double-bottoming and likely to spike = $SPX to drop, but will the drop be more than the 09/13 QE3 offset spike?

Only if the EU & China both have significant problems - or fear of problems - should the $SPX drop.

SEP 24: Greece denies 20 billion euros budget shortfall

SEP 24, later that day: Greece needs more time to fix finances

SEP 25, 0840: The unthinkable — a bailout — now looks inevitable, and markets are watching for the slightest verbally thrown bone from Spanish Prime Minister Mariano Rajoy and his officials.

SEP 25: Euro Relief Rally Threatened By Greece, Spain- Sterling To Outperform

At $USD technical bottoms, 

but the $SPX unreliably operates in the inverse of those.

Bad $USD = Good commodities = Good $SPX.

SEP 25: Dollar Vulnerable to Rebound in Sentiment on Firmer US Growth Hopes

$GOLD, @ technical high, is estimated to spike to >$2,000 in the event the fiscal cliff forces both tax reversion and spending cuts.

60 day Prediction: Not much