Comex December futures hit a new record high of $1424 towards the end of trading on the NYMEX, but just as the NYMEX was about to close short term traders decided to take some money of the table. This move has continued and accelerated into the NY Globex trading session on the back of the FOREX markets bidding up the US$. Currently gold has retraced its gains back to $1391.
It appears the Fed's QEII announcement last week has had the affect of tossing a rock into the small pool of the precious metals markets and the ripples from the initial splash are going to be felt for some time to come. But given time the market will adjust to the new normal of increasing US$ debasement and set the prices of hard money and PGMs accordingly.
Uncle Ben can smile for now, but there will be a day of reckoning. Currency debasement never ends well. That is why the US founding fathers made it a Capital crime, very appropriate as it is a crime against capital.
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