19-Sep (USAGOLD) — Gold has ticked back below the $1800 as the dollar is back on the rise. Resurgent worries about Greece have resulted in the euro retracing much of last week’s rebound into Friday’s meeting of European financial ministers in Poland. Despite the dire situation in Greece, not much came out of that meeting. In fact, the final decision on whether Greece will get their next tranche of bailout funds was forestalled until October.

As we noted on Friday, there is either no sense of urgency on Greece, or their is no consensus that they should get the additional funds. The former seems rather unlikely…

The lack of action on the part of the FinMins to avert a Greek default is weighing heavily on stocks once again. The DJIA is now down more than 200 points and every European index is lower as well. Funds coming out of stocks seem to initially be going into the dollar and low yielding bonds, such as US Treasuries and German bunds. We know from history, that such allocations tend not to be terribly sticky and that true safe-havens like gold tend to benefit in the long-run after initial bouts of deleveraging.

Quiet day data-wise today. Everyone is eagerly awaiting the results of the expanded 2-day FOMC meeting that commences tomorrow. Last month’s outlook downgrade and statement that Fed funds will be kept near 0% into mid-2013 has most analysts leaning toward the dovish side for Wednesday’s FOMC statement. Some version of Operation Twist, a flattening of the yield curve that would likely be accomplished by the Fed selling shorter-dated Treasuries and buying further out on the yield curve, seems to be the front-running expectation.