Five Golden Rings

​For anyone unfamiliar with the old, sometimes annoying, Christmas song, "The Twelve Days Of Christmas," which enumerates all kinds of delights, the break in it occurs when the musical chanting slows down and one of the baubles described is "five golden rings." It sits about midway through the piece.

Today, we are at a such a resting point in gold trading - in all trading, in fact. It's a good day to think about our five golden rings.

1) The Fed has faded as a worrisome bogeyman. You can, after all, only die once (unless you're James Bond) and, once they began tapering, the Fed lost its threatening stature.

2) American growth looks as if it's picking up substantially. How the U.S. government and its independent agencies handle the remainder of tapering, budget and taxation issues, and selling off the sour assets they've accumulated will determine how far and fast that growth goes and if it will be accompanied by substantial inflation.

3) India's tariff-inhibited gold import levels will rise, either by official proclamation or through even more smuggling than is already going on.

4) Physical demand will pick up in industrialized and resource-rich nations. The Untied States may well lead the parade. Earlier this year a simple gold necklace cost $1800. Now it costs $1200 (give or take). And, as millions of Americans get back to work, all those reasons for buying gold jewelry will become more and more rational to people with walking around money, especially after not having much disposable income for 4 or 5 years.

5) Like bull markets, bear markets wear themselves out eventually and new people bring fresh ideas and new cash. At some point, too, the equities rise will slow and people will look to move their money elsewhere.

Trading was very light today and will remain so through the end of next week as the winter holidays run their course.

Merry Christmas, Happy New Year, Happy Holidays to all and...

As always, wishing you good trading,