Kitco daily market comment

By Jon Nadler
You would expect a sizeable pop on the back of rumors that the US is one step closer to avoiding the slide off the Fiscal Curb in two weeks. If a 68-point advance in the Dow and a half dollar gain in gold is that pop, well, it might be owed to the fact that the four-and-a-half people still trading these markets with one week to go before Santa pulls up to the curb are also tired and would rather socialize in the office kitchen than take on new positions.

Then again, rumors are just rumors, and there is a school of thought that sees an interim deal being made so that everyone can go home and enjoy the holiday hiatus and then return in January to truly tackle this situation.

Could this be the first year in many that gold does not close out with a double-digit gain? Could 2013 be the first year in many wherein the average gold price undergoes a modest but (as yet) unfathomable decline?

No one really knows jus yet. However, the bulls have run out, or are almost running out, of supportive BFFs: the Fed and its QEs, India (and to some extent China) gold demand, the threat of hyper- or any meaningful inflation, the Middle East powder keg that was supposed to have mushroomed by now, the scared witless individual survivalist hoarder of coins, and so on.

We are left with hedge funds and their fondness for ETFs - a variable that we would rather not depend on. The question remains one and the same: Where will the $500 million in daily gold investment (required to clear the market's current overhang) come from in coming months?