"It is always the monthly bullish reversals(1770 & 1796) that are the key to any change in the (gold) trend, even short-term. Nothing yet to indicate a change in trend. The rally comes on the back of presumption of inflation but the contraction is still far too great. Unemployment is in a bullish mode and rising pressure on the tax collection worldwide is causing a decline in velocity warning that capital is more likely to go into hiding with taxes in the USA jumping from 15% to 45% in January. This will take a lot more than QE3 to do anything. Everyone is raising taxes precisely when they should not be doing so but governments are desperate to keep interest rates down. Inflation tracks interest rates. When they start to rise then recovery will begin and inflation will emerge. If governments stupidly continue to buy back their bonds, then sell to them. Take the cash now! The next leg will be when they start to chase money and it runs away and then rates will rise rapidly. For now, even Italy sold its long term debt. There are still a lot of stupid people buying government debt. The fat lady remains silent."

Martin Armstrong