Global markets had one large question answered last night by the U.S. Presidential election – U.S. fiscal policy will remain the same. This has supported gold’s rally back above the $1,700/oz level, and allows proper focus towards the end-of-year Fiscal Cliff (I think I’m going to start capitalizing that term.) Had Mr. Romney won, it is doubtful he would have stopped quantitative easing, as it would have dropped U.S. economy down a pit. He would, however, have fired Mr. Bernanke, which would have caused turmoil in the market even if general U.S. fiscal policy had remained the same. As the European economy struggles, China looks towards the U.S. to pick up the slack and import more of their goods. If the U.S. drives over a cliff December 31, it will have the rest of the world in the back seat, taking the plunge with it.
Today’s biggest question: Will the Greek Parliament pass the latest austerity measures demanded by the EU (risking more violence in the streets), or will they refuse to pass it, leading to a default that will turn the European economies into a bad remake of the Titanic?
At 9:45 Eastern time, gold is at $1,720.oz, silver is at $31.89.oz, as there seems to be a bit of early morning profit taking in New York.