Regarding gold, of which we are reasonably long, we note

that gold is indeed moving in contravention to the US

dollar, and no one should be surprised. We've made it

quite clear that we're prepared to add to our long

positions in gold when and only when the EUR trades

upward through 1.5850 and remains there for an hour or

two to prove the movement's validity. We stand by that

statement this morning, noting further that spot gold itself

is, for the first time since mid-March on the hourly charts,

breaking a recent rally high, having held well above its

most recent lows. It did so yesterday when spot gold

moved upward through $923-$925. It remains there this

morning with spot gold trading $931 as we write.

We are all the more impressed by gold's strength in light

of the IMF statement that it intends to push ahead with

gold sales from its reserves, as reported here yesterday.

However, as we also reported, in order for those gold

sales to be effected, the US Congress must agree. Given

that this is an election year, we cannot imagine that any

incumbent Senator or Congressman or woman will want

to go on the record as having supported sales of US gold

to foreign interests. That simply will not "play" well in

Peoria, or Keokuk, or Eden Prairie, or Wilmington. It will

not happen, and thus the prospects of IMF gold sales

cannot and will not happen until after the turn of the new

year... if then.

Further, we note, interestingly, from the ECB's weekly

statement of condition, that not one "legacy" central bank

of Europe sold gold last week. We may be wrong on this,

and we are ready to stand corrected, but we do not

believe that this has happened since the Washington

Agreement went into effect back in '99. Perhaps it was

the quarter end that kept the banks upon the sidelines, or

perhaps it was some other reason that we know nothing

about, but we find it interesting nonetheless. We wonder

then if there will be a doubling of gold sales "this week," to

catch-up the gold sales needed by the WAG signatories

to reach the 500 tonne limit. We wonder further, what if

they do not double up their normal weekly gold sales?

What then shall that mean? Certainly it'll not be bearish.