Hello, Europe. Seeking Guidance.

Aside from some particular individual movers on the equities indices, the reason the markets are tumbling is because Europe is the first world's economic sick man right now.

The why's and wherefore's of the EU's condition are well known by now. Ridiculously tight lending policies and virtually no fiscal involvement by the European Council or national legislatures have combined to nail the continent's shoe to the floor as it spins round, going nowhere.

This is important for gold because it drives down stock prices and coaxes money into gold and silver.

The news today was driven by the release by the International Monetary Fund of a downward revision of world economic growth. The IMF downgraded its broad outlook for global economic growth, citing intractable weakness in the eurozone and a broad slowdown in several major emerging markets.

The IMF said it expects the global economy to grow by 3.8% next year, down from its July forecast of 4%, although that's still better than an estimated pace of 3.3% earlier this year.

The fund trimmed prospects in the eurozone's big-three economies, Germany, France and Italy. The international group says the eurozone is headed into its third consecutive year of minor recession. They warned that the probability of the eurozone re-entering real recession in the next six months has roughly doubled since the IMF's April outlook. It also sees shrinking output in Japan plus lower growth for major developing economies, including Brazil and Russia.

It has to effect the U.S. somehow.

On all that unsettling news, crude tumbled to the mid-$88 range, indicating that the oversupply issue is now meeting a world slowdown. The U.S. 10-year bond's yield fell to 2.35%, a further indication of stumbling in the world economy.

The dollar is down modestly against the other key currencies.

We have yet to see the fundamentals in place that will give precious metals the rocket-powered news that will make it soar. Earnings reports will begin streaming out starting tomorrow, however, so stay tuned.

As always, wishing you good trading,