Stage is set for gold to soar.

It is getting hard to keep the lid on the news. And the news all points to gold moving up....unless the FED is content to watch deflation devour the US economy just before the election. Gold prices, IMO, can be stopped only by massive deflation.

Here is the case for gold increasing in price:

1. The technical breakout of gold and silver was massive.

2. Economic fundamentals. Europe's manufacturing and service index fell for the seventh straight month. Even Germany is barely growing. US Capital goods index contracted 3.4% in July, the largest decrease since 2009. The ECB has pledged to prevent the Euro unraveling and Bernanke promised further easing unless the economy showed some real improvement. It hasn't.

One caveat. The Markets have factored in some form of QE and if the QE is too small, the Stock Market will tumble. Maybe even the PM markets.

3. The political fundamentals. The Greek soap opera is on again. While PM Samaras pleaded for more time for Greece, the French President closed ranks with the Germans to reject further delay for Greece to implement agreed upon austerity. So, here comes the next bump in the soap opera. Germany's Economic Minister Roesler (who is head of the Free Democrats coalition partner of Chancellor Merkel) and Finance Minister Schaeuble all agree that Greece will get no further delay. However, the Greek coalition is held together by the promise that the government will ask for such conscessions.

Who will blink first?