My apologies. I was away part of the weekend and it bit heavily into the time to produce a full report. A shortened version is attached.

This week…

• The Euro debt crisis continues to bite. In the US the Joint Select Committee on deficit reduction failed to come to any agreement. On both sides of the Atlantic the debt crisis deepens. Downgrades were seen for Belgium and Hungary. Bond auctions failed in Germany and Italy.

• The S&P 500 had its worst Thanksgiving week performance since 1932 at the height of the Great Depression. The stock markets are down on the year.

• Bond prices were higher this past week but they closed near the low of the week as concerns rose over the size of the debts and fears that the US bond market had rallied too far.

• Gold prices remain weak, however, they are near support. The 3rd quarter saw strong demand including 148 tonnes purchased by central banks. Gold appears to be falling as the US$ rises. The US$ is rising as a result of the Eurozone crisis and the rush out of the Euro. There are threats that the Euro currency could come apart.

• Oil prices were off slightly and natural gas enjoyed a strong up week. Considering the threats to the global economy as a result of the ongoing debt crisis in Europe and the US oil prices are holding up remarkably well. Such is the premium being paid because of the threat of Mid-East unrest.

D.C.

Chart of the Week – US GDP – sinking

Stock of the Week – A gold value stock

D.C.

This week…

• The Eurozone crisis continues with no apparent relief in sight. Fitch issues warnings about US banks where apparently 97% of all the credit default swaps (CDS) lie with 5 large US banks. The stock markets blinked and now the S&P 500 stands of the brink of a breakdown.

• US Treasury bonds rose as the Eurozone crisis deepened. It remains a classic flight to safety. But given the acrimony over the resolution of the US’s $15 trillion debt it may not stay that way for long if the focus of attention shifts back to the US from the Eurozone. QE continues to be the only tool left for the central banks to possibly resolve the global debt problem.

• Gold fell but there appears to be extenuating circumstances. The conditions for gold have it appears never been better. The World Gold Council reported the second highest demand ever in the 3rd quarter. Central banks continue to buy and China is challenging India as the largest consumer of gold.

• Oil prices rose on fears over the sabre rattling in the Gulf concerning Iran. But oil prices fell as the Eurozone crisis deepened. Oil prices are concerned about both and each tugs the other. The former may win out in the end of an attack actually occurred. Natural gas set new lows.

• With falling commodity prices the TSX Composite could not rise.

D.C.

Chart of the Week – Gold stocks poised to breakout?

Stock of the Week – Gold stock in the news jumps!

D.C.

This week…

• The story of the week continues to be the ongoing drama in Europe. This past week saw two Prime Ministers resign and the appointment of two new Prime Ministers in Italy and Greece. Whether this is sufficient to turn things around remains to be seen. The devil as they say is in the details.

• The S&P 500 eked out a gain on the week thanks to some better than expected consumer confidence. The stock market is now at a critical juncture where it either must continue recent gains as failure could mean a return to the lows of October.

• US Treasury bonds fell when there appeared to be a resolution in the Greek and Italian crisis. This week, however, there is another Italian bond auction. If it goes well that would help the Euro and push the US$ down and that would translate into falling US bond prices. If, however, the auction should fail then …..

• Gold rose on the week as the US$ failed to sustain its up move even as the Euro continued to falter. The gold market is appearing its most bullish in a few years as seasonal demand begins to kick in. A break over $1,850 would suggest that new highs above $1,910 are probable.

• Oil prices broke above $95 but further resistance lies above at $100 and up to $102. Natural gas prices remain moribund.

• Unlike the S&P 500 the TSX Composite failed to rise this past week. Gold was up but financials and metals were down and that helped ensure the TSX did not have a gain.

D.C.

Chart of the Week – US Unemployment

Stock of the Week – Energy stocks could move up

D.C.

This week…

• The story of the week remains the ongoing crisis in the Eurozone. The Eurozone crisis is impacting everything – bonds, stocks, gold and the currencies. As the markets left off on Friday it appears that the Greek coalition may be coming apart and calls are for an election. Over the weekend a Greek coalition was formed and Greek Prime Minister Papandreou has resigned. A new prime minister is to be appointed. An election has been called for February 19, 2012. Calls are also out for Italian Prime Minister Berlusconi to resign. Calls have also been made for Germany to use its substantial gold reserves as collateral for the Eurozone bailout fund. Germany has stated though that the reserves cannot be touched. A sale of Italian gold has been proposed by Germany to help Italy pay down some of its debt. Germany has also called for access to debtor “PIIGS” countries gold reserves and industrial facilities as payment for loans. Based on all the talk of using gold reserves appears to be suggesting that gold has monetary value once again.

• There are a few important cycles that saw a decline in November/December following a rally in October. Could this be a replay of those earlier cycles?

• Bonds rose as the Eurozone crisis roiled. Bonds are seen as a safe haven. Weaker job numbers in both the US and Canada also helped propel bond prices higher.

• Gold prices rose even against the backdrop of a rising US$. That might be viewed as a positive. But gold (and silver) still need to overhaul some important resistance above if they are to firmly breakout. Positive seasonals that get underway in November may help propel the precious metals higher. The gold stocks enjoyed strong follow through to the upside this past week and are close to overhauling resistance above.

• Oil prices rose but the energy stocks fell. Oil prices are struggling under $95. A breakout over that level would be positive even as there is further resistance above. A story that Israel is preparing to attack Iran hit the mainstream newspapers this past week. Some points against that are detailed.

• The TSX Composite fell this past week even as the sub indices split themselves with 7 up and 7 down.

D.C.

Chart of the Week – The Euro

Stock of the Week – A hedge

D.C.