Gold's inflection point.

Gold prices have not changed much in over a year. This is prompting some folks to write about the end of the Bull Market in gold. Goldman Sux, for example, has reduced its forecast for gold prices. The rationale is based on the forecast that the European and US economies will recover in 2013, interest rates will go up and investing in gold will go down.

Goldman would be more persuasive if it was not being reported that Goldman is buying gold for China and, therefore, they have an ax to grind. Forecasts for economic recovery are equally dubious. Numbers are absolutely dismal for Europe and not better for the United States. Take the last employment report. We know that the US needs at least 250K new hires/month for employment to stay even. So, how could a 143K new jobs reduce unemployment from 7.9% to 7.5? It is because the labor force is shrinking, that's how. If you divide the number of workers working by an ever decreasing number of total workers, you will get the impression that the %employment is increasing. In actual fact, the number of the work force working is decreasing.

The FED is getting set to continue expanding the money supply and Central Banks are still buying gold. Gold prices are kept low by big sales of paper gold, i. e. gold that exists on paper. We know, for example, that Germany's gold has been leased out for just such a purpose. Bernanke will outdo himself printing in hopes of countering the negative effects of rising taxes and continued spending. He will fail.