“After breaking through some key technical supports in the mid-$800s, gold’s pullback deepened as funds continue to liquidate positions and add to the short-term negative momentum. This has made a move back up towards the mid $800’s difficult with many traders now waiting for a period of consolidation to ensue before seeing gold return back up to the mid to upper $800s. The fundamental drivers remain in place for gold and I would view this as an excellent opportunity to buy the dip of this long-term secular bull market. There is strong physical demand emerging which will help place a floor in the gold market around the $800 level.

The short-covering rally in the dollar is a prime driver for the pullback in gold prices and that was aided by free market intervention by Central Banks. All this has done is provided additional time before the serious nature of the financial crises has to be once again confronted. There are major banks and financial institutions which remain highly undercapitalized. I would expect some major news in the coming months which will again bring to the forefront the gravity of the situation. The ingredients are in place for a significantly higher gold price and this short-term anomaly only means that gold can still be accumulated sub $1,000 an ounce. The rapid rate at which dollars are being created (according to shadow stats the no longer published M3 is expanding at double digit rates) remains the primary driving force in the gold market, this cheap monetary policy will continue to debase the value, integrity and confidence in the faith-backed Dollar. Competitive paper money devaluations will enhance gold’s luster going forward as hundreds of billions of fictitiously created paper currency is used to continue these monstrous bailouts with government deficits rapidly growing.

I do believe we could easily see record gold prices as we close out 2008 and enter 2009. These are desperate times and desperate times call for desperate actions. The pullback is the result of free market manipulation by the powerful central banks.”- Peter Spina, www.goldforecaster.com

“Gold continued to drop on the back of COMEX and speculative selling as the $ climbed to almost 10% better than the low of its recent $1.60 low against the Euro. The market believes that the strength of the $ is being engineered by the G-7 central banks, because the interest rate differentials favor the Euro as well as the oil price ensuring still that the Trade deficit continues to bleed the U.S Balance of Payments. This almost straight line move by speculators exacerbates the volatility of the market in precious metals and now in the $. It seems too good to be true and in the past, when such intervention is seen, it almost always ended badly, so we expect considerable volatility in the currency markets as well as the precious metals and it could well be both ways.”- Julian D.W. Phillips, www.goldforecaster.com