Looking at the huge divergence between the continued growth in the U.S. national debt and the drop and subsequent tight trading range for gold between $1,200 and $1,400, one can only conclude that gold is somehow being prevented from its previous job of accurately reflecting an explosive U.S. national debt picture.
Following questions asked in Parliament earlier this year regarding the 3,396 tonnes of gold bullion, federal auditors have now instructed the Bundesbank to regularly inspect the gold bullion reserves held in the US Federal Reserve, Bank of England and Banque de France.
The precious metals conspiracy camp is possibly about to be dealt another blow by the near-completion of the audit (yes, audit) of the USA’s gold being held at the NY Fed. The Treasury Department has been counting and drilling and drilling and counting the thousands of bullion ingots.
The new trading week started off on a downbeat note in commodities, equities, and a crisis-beset currency across the Atlantic. Risk assets headed lower on a combination of anxieties surrounding global economic expansion, and persistent systemic troubles in the euro zone and China.
The second central bank currency market intervention in as many months sent the US dollar soaring and gold reeling overnight as market players rushed for various entry and exit doors to take advantage of the overt move.
Commodity prices rose this morning along with the levels of optimism surrounding the euro-debt summit and along with the region's common currency. Gold and the euro have been BFFs of late, so the yellow metal also gained in value.
Gold prices are stalling having taken out resistance at $1,468.29 - the 138.2% Fibonacci extension of the 1/3-1/28 downswing - with negative Relative Strength Index divergence arguing for a pullback over the near term.
A massive meltdown in precious metals and key commodities followed the massive meltdown in Japanese and world equities which followed the apparently imminent meltdown at the Fukushima nuclear plant in Japan.