Good Morning,

Gold prices remained in orbit around the $860 value zone and saw a rather tight range ($856-$868) overnight, but were unable to get out of the minus column despite a 0.54 drop in the greenback (to 82.32 on the index) and a small rise in crude (to $48.80 per barrel). At the opening of the New York session, bullion was down by $0.80 to $862.70 per ounce as participants weighed Fed predictions of worse things to come for the US economy, and Mr. Obama's warnings that US deficits on the trillion-dollar scale could be a feature for some years to come. In other news, the majority of surveyed millionaires (many of whom lost around 30% of their wealth last year) feel that their investment advisors have let them down - right when it counted most. No surprise there, as conventional wisdom says that the truly worthwhile managers only shows his mettle during market downturns. If you want to call last year's bloodbath a downturn...

Silver started the mid-week session with a 9-cent loss, quoted at $11.35 per ounce. Platinum rose $26 to $987 as statements that it will survive unless the economy gets worse by GM and fears of platinum mine closures buoyed speculative sentiment for the noble metal. Palladium was higher by $2 at $198.00 per ounce. Swiss guru Marc Faber (a long-time gold partisan) opined that gold is expensive in relation to base industrial metals and that he favors them (and related shares) over bullion until adjustments in prices come about. Yesterday's announcement of 13,500 job cuts at giant Alcoa appeared to have little impact on base metal prices and related stocks. Thus far.

A record number of US layoffs during December unsettled markets overnight and pulled the dollar lower as well. Coming just 48 hours before the Labor Dept.'s nonfarm payrolls report for the same month, the unofficial survey by the outplacement firm Challenger gives a good hint of where things are headed. About 1.2 million jobs were done away with in 2008, the most since 2003. Expectations are that US unemployment will touch the seven percent mark in the near future. The jobs situation and its effects on the dollar and the markets will likely dominate the next two trading days' tone. US job cuts have risen four-fold since a year ago, and the situation does not appear to be turning up yet. Let's see what the ADP survey brings to the headlines later on.

Eastern Europe went into shiver mode as Russia turned off all of the gas taps that feed the region via the Ukraine. Consumers found themselves on the short end of the gas stick just as a wintry blast is keeping temperatures way in the negative end of thermometres. Alternate fuels are being warmly suggested by authorities. In stark contrast to the gas situation, the news that oil traders are searching for at least 10 supertankers in which to store crude oil at sea as the IEA said that demand for black gold fell for the first time since 1983. Peak oil: may acquire some new meanings shortly.

Lest you think that inflation, or the hyper-strain of same are just around the corner, Bloomberg has some interesting news for you. While the Fed is seen as adopting the Japanese lingo of desirable levels of inflation and targeting numbers in order to keep things from going off out of control in either direction, there are some indications that we may have to wait several years before having to fear the i word too much. The obsession du jour remains DEflation and DEpression.