Gold has been on a march higher of late, having recently reached our first previously espoused zone of resistance near $351, and with a shot to perhaps soon reach $371. We are pleased to have turned from agnostic to bullish on the metal back on September 7, 2002, and also pleased to have recently turned our former bearishness on oil into general bullishness back on November 16, 2002.

The above understood, when we wrote up our annual forecast for the equity markets looking forward into the new 2003 year (available to subscribers by clicking here), we left out commenting on the gold sector at all. This is because we could not find a compelling Fibonacci rhythm or Elliott wave count to offer. Gold could as easily explode from its current formation as it could miserably fail somewhere between $351-$371.

We have our eye on gold at this stage to watch for clues as to which it will be, but must admit that agnostic feelings are starting to re-emerge in our psyche. Gold will undoubtedly be higher 10 years from now, but the first stage of increased debt defaults (that we perceive to still currently be wading through) is more a rush for liquidity -- the need to find cash to meet immediate debt obligations -- rather than a rush to establish long-term hedges against an overly generous Fed.

An alternative view might be that gold is currrently rallying as a reaction to the European Union's recent announcement that with time it will embrace the entire Eastern bloc of European nations. Look at the day that the EU announced this decision and gold's immediate behavior thereafter, and one might be tempted to think that U.S. monetary policy is not the immediately important factor in gold's recent strength. Rather, gold may be rallying simply because with the long-term path now established by EU authorities, no one is truly that excited to buy the euro at 1.03 -- no matter how poor the U.S twin deficit of trade and budget soon become.

Whatever the case, we'll still be selling our Ashanti if and when it reaches our previously anticipated Fibonacci target shown below.

Chart constructed using Advanced GET End-0f-Day

In addition, leaving gold to the side for the moment, we offer to subscribers this month 18-pages of various perspectives on 2002 and ongoing concerns we have for 2003. This includes a general overview "roadmap" of our cyclical perspectives for 2003, as well as selected stocks that we like both on the long side, and a slightly longer list of stocks we still dislike on the short side -- complete with Fibonacci price objectives on the entire group.

May our subscribers enjoy this bit of reading over the holidays, and profit from it in the New Year. Meanwhile, may all our other readers soon become fully paid-up subscribers to truly reap the full benefits of this site as it enters its fourth year.