IMF Completes Sale of $19 Billion Worth of Gold

Yesterday, the
International Monetary Fund quietly announced that it had completed the
sale of over 400 metric tonnes of gold to Central Banks and other giant
institutions.

Thought it’s one of the biggest single sales of gold in world history, it
was largely ignored in the mainstream press.

Most remarkably, this record gold sale has had little effect on the price
of gold futures.

Gold Breaks $1,400 on Jobs Numbers, China, and Europe

The strong gold bull market of 2010 resumed today with gold rising above
$1,400

The spot price for gold was $1,413 as of 4:00 p.m. eastern time. Gold hit
all time highs in November then backed off as the dollar gained strength
primarily due to weakness in the euro. Today gold retraced back to over
$1,400 on labor department numbers showing anemic job creation and the
revelation of China’s gold import numbers.

The Labor department announced employers added only 39,000 jobs in
November, far below analyst expectations and the strong gains of 172,000 in
October. The overall unemployment number crept closer to 10% as it rose to
9.8% after months of holding at 9.6%.

Gold and other commodities priced in dollars have a tendency to rise in
value when the U.S. dollar falls relative to other currencies. Many
investors also consider it a

Gold Not at Record High

While most of the mainstream media readily announces new “highs” for the
price of gold, The New York Times just published an article
denouncing such statements.

From the story: “The actual record was set 30 years ago, when the price
of gold, in today’s dollars, hit $2,387, or 71 percent higher than it
closed on Tuesday.”

It’s important to remember that gold’s price has much further to run
before it matches inflation adjusted highs set in 1980.

Is This the Dip to Buy?

It’s Veteran’s Day, I’m taking a moment to recognize
the sacrifice and dedication of our military.

The bond markets are closed today, so we’re losing
an important catalyst for the stock market. Without the running gauge for
the U.S. dollar, traders will have to depend on recent news to drive the
action today. And that may not be a good thing…

Cisco (Nasdaq:CSCO) is down huge after its
earnings report last night. The company beat earnings by a couple
pennies, but offered guidance that was well below expectations.

Gold Soars to $1,400 as World Bank President Debates a Return to Gold Standard

Yesterday, the President of
the World Bank, Robert Zoellick discussed the idea of using gold as a
“reference point of market expectations about inflation, deflation and
future currency values.”

He went on to say, “Although textbooks may view gold as the old money,
markets are using gold as an alternative monetary asset today.”

Mr. Zoellick’s comments were timed in advance to a meeting later this
week of the G20 nations in South Korea.

The Fed Wants Inflation

Yesterday, the Fed said it was prepared to move on new
stimulus if the economy weakens further. What’s more, the Fed’s statement
that inflation is below levels it wants to see suggests that further easing
is coming. That’s a clear indication that the Fed is still worried about
deflation.

I suppose it’s a good sign that the Fed held off on new
easing action. But the Fed also failed to sound a confident tone about the
economic recovery, which I think is mistake.

Of course, we know the economy isn’t great. But most
economic data has improved over the last month or so. And it should be
understood that there is no magic bullet that puts millions of Americans back
to work. It’s going to take time, re-training and probably some government
incentives.

What Yen Intervention Means for Gold

Last night, Japan
did something it hasn’t done since 2004. It sold yen to push
the value of its currency lower. A weaker yen helps Japanese exports and is a
tool for fighting deflation in the country.
Japan officials didn’t say how much yen they
sold, but it drove the dollar 3% higher against the currency.

As we know, a stronger dollar will push oil prices lower.
And it will affect stocks, too.

Japanese stocks are up 2% across the board. We’ll see if it
affects
U.S. stocks to that
degree. Declines are likely to be short-lived as the market adjusts to the
yen intervention. This will be the dip to buy for investors who missed the
start of the current rally.