Metals await further developments

Metals have adopted a recurring theme of late. Gold is bid to looming instability due to deflationary pressures impacting credit quality, general lack of confidence in monetary authorities ie, CB’s, perhaps Chinese New Year demand is helping. Bottom line, the debt load is becoming unsustainable, even low interest rates cannot hold the floodwaters back. Sooner or later the debt burden will have to be dealt with  either  a robust economy (not happening) in the EM’s , inflating away the debt , hard to imagine, given 2% inflation is hard to come by, more money printing, decline in the dollar. A decline in the dollar is probably the easiest solution. Now that negative interest rates are mainstream, it is no wonder gold is well bid. The capital drain in the oil sector, the EM’s and now the stock market makes it hard to imagine metals doing much. However, money will appear when opportunity  knocks. We are witnessing the decline of a great empire.