Gold and Silver have risen quickly to a very important resistance level. I do not yet consider this an achieved breakout.
There are strong cross currents in these markets, the global sovereign debt situation in Europe, and the less remarked situation in the domestic US, highlighted but not captured by the debt ceiling debate which is more of a showpiece than a serious change and prioritization.
I suspect that if the US comes to a resolution of its troubles, for a few days at least the markets will rally, and the metals and perhaps Treasuries will be beaten like rented mules.
However, the looming crisis in Europe, which has the banks salivating for cheap national assets, is going to continue to weigh on markets by posing systemic risk in the manner of Lehman Brothers.
And as a reminder, the August Comex Options Expiration is next week.
I thought it was interesting that the US dollar has failed to rally along with Gold and Silver, at least to the same extent of breaking out to new highs.
Robert Baer, a distinguished ex-CIA officer, published a warning from his own knowledge and sources about a regional conflict in the Mideast in September between Iran and Israel. For now I consider this 'sabre-rattling,' and if Baer had not chimed in I would not even bother to mention it.
I would keep an eye on any developments, although these concerns are not new. Such a conflict, if it occurs, would have some benefits to a powerful few, but pose a significant risk to the many. Macro events and crises such as war can be used to hide a multitude of sins, but like most deadly things involving the will to power, they sometimes are difficult to control for other ends.
