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Gold is edging closer to resistance at $1,800…as of 6:50 am Pacific, the yellow metal is up $14 an ounce at $1,783…Silver was off slightly earlier this morning but is now up 40 cents to $35.04…Copper is up 4 pennies at $3.77…Crude Oil is 82 cents higher at $93.24 while the U.S. Dollar Index is down one-fifth of a point at 79.22…

A “Golden Cross” has formed on the Gold chart which gives bullion investors even more reason for optimism…Gold’s 50-day moving average (SMA) has now moved slightly above its 200-day SMA, indicating bullion’s intermediate and longer-term momentum is becoming increasingly bullish…in John’s daily chart below, going back to April, you’ll also note that Gold is clearly in overbought territory on a short-term basis, so a pause in the near future should be expected with the resistance band starting at or near $1,800…

Below is a 3-year chart from John that shows the last time the 50-day (in this weekly chart, the SMA-10) crossed above the 200-day was in early February, 2009, and the Gold price then jumped 11% over a two-week period before a minor consolidation set in…

Obama Good For Gold

If you own Gold (or Gold stocks) and want to see even greater returns in the months ahead, you should be rooting for the re-election of President Obama in the upcoming U.S. elections, according to BMO Financial Group Global Portfolio Strategist Donald Coxe…in an exclusive interview with Kitco News, Coxe pointed out that Gold could easily go higher if the problems in Europe continue and if Obama is re-elected…Coxe is also Chairman of the Chicago-based investment advisory firm Coxe Advisors LLC…“Obama runs a deficit of over a trillion a year…in his first two years in the White House, he didn’t produce a budget at all…and his only proposal for reducing the deficit going forward is to tax the 1% of ‘rich’ people – if you tax that away you might raise as much as $500 billion over the next decade but that doesn’t put a dent in it…so what we are going to have is more of the same,” Coxe said…

Worth adding to Coxe’s comments is that the ideal scenario for Gold is a Democratic sweep, just like in 2008, with Obama winning re-election and Democrats maintaining control of the Senate and regaining control of the House…the odds of that are becoming increasingly likely given the potential collateral damage Republicans may suffer thanks to an incompetent Presidential campaign being run by Mitt Romney…

TD Raises 2013 Gold Price Forecast To $1,900

The Globe and Mail reports this morning that TD Securities has raised its forecast for Gold to average $1,900 in 2013…TD analyst Greg Barnes says stimulus programs “leave the door open for Gold to move higher in the face of increased liquidity and rising inflation concerns”…since the start of September, the Gold price has risen 5% while the S&P/TSX Gold Index has climbed 14%, notes Barnes…”We believe that the out-performance by the Gold equities over the past month reflects two things…Gold equities were oversold in our view, and investors are beginning to believe that the capital expenditure and operational expenditure inflation that has dogged the producers for the past three years is starting to moderate”…TD’s top picks along with new target prices (in brackets) are as follows: Eldorado Gold ($20 a share); Goldcorp ($60); Yamana Gold ($25); B2Gold ($6) and Alamos Gold ($26)…among the juniors, the team likes Continental Gold ($12) and Rubicon Minerals ($5)…

Silver ETF Holdings Near Record Levels

Investors have so far purchased more than 32 million ounces of Silver through Silver ETFs this year, according to the the Washington, D.C.-based Silver Institute…Silver ETF holdings now total more than 608 million ounces with a value of $20.5 billion through September 15, the Institute stated in a news release Wednesday…”Significantly, from January, 2009, through September 15, 2012, the Silver price has increased an astounding 211%,” said the Institute…”Factors leading to the price increase include a desire by investors to diversify their portfolios with hard assets, the diminished value of key currencies and continued global economic uncertainty…investors and analysts are bullish on expectations that additional central banks will do more to attempt to stimulate the economies in order to increase consumption and spur employment, leading to even greater investor attention on the 4,000 year allure of Silver as a safe haven and a store of value,” said Silver Institute Executive Director, Michael DiRienzo…

U.S. Dollar Index Chart Update

The greenback has clearly broken down and will likely be pressured and constrained by a downtrend line for many more months which is very bullish for Gold and Silver and the Venture Exchange…while it’s currently bouncing up from temporarily oversold conditions, the U.S. Dollar Index faces huge resistance at the old support band beginning at 81…traders will enjoy shorting any rally that takes the Index up to that level…below is an updated 6-month daily chart from John…notice how the euro broke out relative to the Dollar Index in early August…recently, the Venture Exchange has done the same…

U.S. Risks Igniting New “Currency Wars”

Guido Mantega, Brazil’s finance minister, has warned that the U.S. Federal Reserve’s “protectionist” move to roll out more quantitative easing will reignite “currency wars” with potentially drastic consequences for the rest of the world, according to a report in the Financial Times…he said QE3 was aimed at lowering the U.S. Dollar and boosting U.S. exports…as finance minister under President Dilma Rousseff and former president Luiz Inácio Lula da Silva, Mantega has watched Brazil’s economy move from confident boom to near-stagnation this year…he cited Japan’s decision this week to expand its own QE program, coming on the heels of the Fed’s decision to launch further QE last week, as evidence of growing global tensions…“That’s a currency war,” he said…Mantega coined the phrase “currency wars” two years ago when the second round of QE by the Fed pushed a wall of money abroad, leading to a punishing appreciation of many emerging market currencies, especially Brazil’s…

Fed Encouraging Inflation, Will Clean Up Mess Later:  El-Erian

The Federal Reserve and Chairman Ben Bernanke not only are willing to tolerate inflation but actually are trying to create it, with a “mess” left behind for their successors to clean up, according to Pimco’s Mohamed El-Erian in an interview this morning with CNBC…the reason, the Pimco CEO said, is that the risks outweigh the rewards as the central bank tries to stimulate an economy that is still struggling three years after the financial crisis recession ostensibly ended…El-Erian has called the policy a “reverse Volcker moment” in reference to former Fed Chairman Paul Volcker, who rose rates and deliberately put the nation into recession in the early 1980’s to control runaway inflation…”Not only will they tolerate higher inflation, not only will they wish for higher inflation, but they actually may target higher inflation,” El-Erian, who helps run the largest bond fund in the world, said during a “Squawk Box” interview…”This is true for all central banks — the (European Central Bank), the Fed, the Bank of Japan, the Bank of England. We are so deep into unfamiliar territory, so deep into experimental mode, that we don’t know what the consequences will be,” he said. “Whoever comes afterward will have to clean up the mess”…El-Erian added, “This is true for all central banks – the (European Central Bank), the Fed, the Bank of Japan, the Bank of England…we are so deep into unfamiliar territory, so deep into experimental mode, that we don’t know what the consequences will be…whoever comes afterward will have to clean up the mess…this is a historical bet that our kids will be reading about in history books,” he concluded…

Today’s Markets

Markets are up across the board this morning and appear poised to finish the week on a strong note…the Venture Exchange is up 13 points at 1348NG as of 6:50 am Pacific…as we mentioned yesterday, the next major short-term resistance level is 1375…

New Gold Inc. (NGD, TSX) Chart Update

One of our favorite producers is New Gold Inc. (NGD, TSX) which came out with a very robust Preliminary Economic Assessment on its Blackwater deposit yesterday…the stock reacted well, closing 18 cents higher at $12.32 on a slightly negative day for the Gold stocks as a whole…as of 6:50 am Pacific, NGD is up another 15 cents at $12.47…New Gold has staged a confirmed breakout above a downtrend line, as shown in John’s 2.5-year weekly chart below, with the next major resistance at $14…