Larry raises gold market low.

Larry Edelson is a forecaster of gold markets par excellence. His previous forecast for the low for gold was between $1,000 and $1100/oz. He has now raised the forecast low to between 1,244 and 1,310.

Why the change? I tell you. I don't know.

What I do know is that Larry expects gold to go up as the European situation deteriorates. And there are reports of interbank loans just about frozen in Europe. Physical gold is doing well (paper gold not so good) and miners have been inching up.

Larry's forecast was for gold to turn around before the end of QII, 2013 and we have two more weeks for that.

The latest PPI for May was 0.5% vs the expected 0.1%. This on top of the rise in interest rates on Treasuries. To me this is an indication that the FED is losing control. Add to this that the deficit had "unexpectedly" increased (along with the unemployment) and brave words about "tapering" QE are whistling past the grave yard. The Stock Market is kept up by the hot air from QE 3 and 4 and any attempt to reduce the money flow will have serious repercussions.

We know that artificially low interest rates bring on deflation (a la Japan and its lost decade) and Japan has now been joined in that folly by the US and Europe.

One more thing about Larry's forecast: he expects the Dollar and gold to rise together as the Euro and the EU go into terminal decline.

The FED mucky mucks meet next week so we will see.