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December 2012 was a touch-and-go month for gold, as it ended the month about $50 lower than it started. Some may be led to think that the value of the metal had tanked, at least judging from recent sensationalist headlines calling it a risk asset rather than the traditional hedge against inflation that it has served for centuries. A number of pundits have gone so far as to show the numbers behind why gold prices should be marked to oil, not the dollar. Others have begun to realize that gold has not tanked because more than Americans buy and trade the metal. Still others claim that like fiat money, gold’s value is a group hallucination.

But no one can deny one simple fact: Since 2001 – and including in 2012 – the price of gold has climbed each year over the previous.

Despite a fourth week beneath $1700, physical gold continues to inspire confidence, remaining a safe haven during this rather frantic close of the year. Gold closed up Friday at $1657.50 while silver closed up at $30.15. With the country now coming ever so close to going over the fiscal cliff, many analysts believe that the U.S. will end up doing just that. Meanwhile, forecasters are calling for the European Union to remain intact, but with significant shocks for 2013. Renewed unrest in the Congo throws Chinese mining interests in the region into flux. Ongoing tensions in Sudan, Libya, Egypt, Israel, Palestine and Syria complicates the future of oil, rare earth and precious metal prices creating a fiscal time bomb in the region. In Asia, Japan’s growth has come to an almost complete halt, but South Korea is seeing surpluses. The Chinese business sector is chomping at the bit for a stabilized stock market, looking to initiate a backlog of IPOs. Brazil’s economy is on fire, but they are importing gold. Bolivia has made good on nationalizing a few mines and Peru may finally make that move in early 2013. The world continues to spin, and precious metals and rare earths continue to be its axis. Have a prosperous New Year.

Although it was a short week for the markets here in the US, you wouldn’t know it judging by the news. The cease-fire in Gaza ensured that many would not have indigestion while eating their holiday turkey. However, the devil is in the details and the market responded appropriately with gold closing up at $1734.50 and silver up by 3.5% to close at $33.41, no doubt due to Iran’s and Japan’s sudden infatuation with the white metal. Meanwhile, the greenback shed significant value, indicating that moves from the Eurozone to stabilize Greece could bode ill for the dollar standard. (Are we closer than we know to a gold standard?) If the US slips into a “Japanification” of its economy, gold bulls could well come out on top.