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.
Wholesale quotes for gold bounced from one-week lows beneath $1,270 per ounce Tuesday morning in London, turning higher as Asian and European stock markets failed to extend Monday's rise to new all-time highs in U.S. equities.
The wholesale price of gold recovered all this week's previous 2.1% drop by Thursday morning in London, trading back at $1,288 before slipping $5 per ounce as the U.S. dollar steadied on the currency market.
For Indian households outside the major bullion centers, the gold price has now fallen below main-market prices, reports the Times of India, lagging Mumbai's futures contracts by as much as 1,000 Rupees per 10 grams – more than 3%.
After having once again failed at the $1,696 resistance level on Wednesday, gold prices headed lower for a third straight session this morning. In the process, the pivotal 200-day moving average price near the $1,608 level was breached by sellers.
Financial history tends to be cyclical, and the US economy is now late in the cycle of the latest credit unraveling – with each fresh round of additional new money having less and less impact on those desperately seeking yield of any kind.