Our fundamentals models have been bullish the gold bullion market, for what seems like eons, at US $390, and have now turned bearish due to a number of fundamental and technical factors:

1  Diminishing gold demand by investors, fabricators, and a slowing US, and global economy.

2  Most commodities are now in an intermediate liquidation phase that will likely last several months.

3  Little to no correlation between the US dollar and gold.

Factor 1

           Our interest rate models and econometric models have been forecasting a slowing economy for many months now, somewhat accurately.  The rise in debt instruments and falling economic numbers published from Washington bear out this forecast.  But, actual gold demand has slackened due to higher prices more than anything else. 

The market, in other words, is at a psychological inflection point that should be short lived in the grand scheme of things, but not before pushing bullion prices down to a likely support of $500 to $450 per ounce.  Thus, are intermediate models are now bearish both the gold and silver complex.

Factor 2

          Most commodities are now in a liquidation phase as measured by the commodity research bureau index (CRB), crude oil prices, and even hard assets such as real estate, particularly in the US. The only model that currently remains bullish amongst the many commodity markets that we follow is the grain markets, and this is likely due to the artificial, but nevertheless, structural demand created by recent ethanol legislation. 

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