This week in Gold covered a $61.00 range but Who would have thought it would happen in one day. The February Globex Gold covered a $61.00 range today. Posting an $1196.80 High and a Low of $1135.80.... The news of Dubai's debt problems with assured creditors sent the Asian equity markets drastically lower (Tokyo Nikkei dropped 3.2% / Hong Kong lost 4.8%) and forced investors buy Dollars as a safer haven. (U.S Dollar rallied 2% from 15 month lows). Dubai owes creditors in excess of $60 Billion and has requested a debt freeze until May. This shook the Global financial world as lenders questioned the possibility of Dubai being the tip of the iceberg concerning debtor nations. This sent the Gold on an avalanche sell-off of all-time proportions and forcing many Bulls ducking for cover. However, the resiliency of the Gold market rallied from $1135.80 to a settlement of $1175.50 by the end of the day session. As a Gold bug I believe this dip offered bargain basement entry opportunities for fellow Gold bugs. This week we reported:

(1) Jobless Claims falling dramatically from 501,000 to 466,000
(2) GDP expectations were less than expected (2.8%)
Translation: less consumer spending and higher deficits.
(3) New House sales declined 3.6%.
The IMF (International Monetary Fund) reported Wednesday 11/25
It had sold 10 metric tons of Gold to Sri Lanka central bank ($375 million). as well as 2 metric tons to Mauritius on 11/11 (71.7 million) as safe haven protection against economic uncertainty. Viet Nam is expected to import 6 metric tons of Gold bullion to help stabilize domestic prices. The Wedding season in India (November through January) is causing jewelers and their clients to reach a compromise. Indian Brides buying jewelry believe bigger is better however, with the price of Gold rapidly approaching $1200.00 per ounce more clients are requesting their designs be made with less Gold. India is the world's largest consumer of Gold. It is reported they consume approximately 20% of Gold global demand. The jewelers of India had expressed interest in buying Gold around the $1125.00 -$1130.00 level last week....Possibly this knowledge helped top the avalanche sell-off early today....

Mike Daly / Gold Specialist
PFG BEST