The talk of the town is that gold can see more upside if rates decline. That seems to be at odds with the view that gold is a hedge against inflation since lower rates reflect more deflation. The confusion seems to really be in the relationships. Gold is rising simply because the stock market has declined. Nevertheless, the key area remains $1208. We need to see this exceeded on a weekly closing basis to imply some sustainability short-term. Keep in mind this may be merely postponing the inevitable for the economic meltdown to be pushed off into 2017 moving into 2020. From a timing perspective, caution is advisable as we enter next week.
