December Gold soared to the upside on Thursday following a sharp break in U.S. equity markets. Traders increased their long hedges in gold on the stock market weakness. As mentioned several times the past few weeks, gold (hard asset) and stocks (paper) are competing for the same investment Dollar. Gold has had a tendency to rally lately following sell-offs in the stock market.

The EUR USD is trading sharply higher overnight as speculators increase bets the U.S. economy will continue to weaken. Traders are basing their expectations in part on U.S. economic reports this week which are expected to show a slower than expected recovery.