Red-Hot Resources: Monthly Gold Chart & Happy Festivus!

Merry Christmas-Eve-Eve! Or Happy Festivus, if you're so inclined. Let the Airing of Grievances begin!

Here's my chart for today -- a monthly chart of gold. Note how the recent uptrend has been tested but hasn't broken (yet anyway). In fact, RSI, a measure of momentum, is now giving a "buy" signal.

I think gold could enter the New Year in a very positive position. Still, watch the euro-us dollar relationship that I posted about yesterday. That is probably the real key to what happens with gold.

Here is the other news and analysis I'm reading ...

U.S. debt approaches insolvency; Chinese currency reserves at risk

According to new figures published by Bloomberg in recent days, the American government has employed a total of 8.549 trillion dollars to stop the financial crisis. This means a total of about 24-25.4 trillion dollars of direct or indirect public debt weighing on American taxpayers. The complete tally must also include the debt - about 5-6 trillion dollars - of Fannie Mae and Freddie Mac, which are now quasi-public companies, because 79.9% of their capital is controlled by a public entity, the Federal Housing Finance Agency, which manages them as a public conservatorship.

Canaccord Adams: The worst for junior mining ‘is likely behind us'

"The year 2008 has shattered investor confidence, and market valuations reflect risk-averse investor sentiment," the analysts advised. "We believe that, to achieve a sustainable rally in the junior mining sector in 2009, investors must regain confidence in broader equity markets. "
"Given the ongoing issues in the global equity and credit markets, we believe that investors are likely to remain somewhat risk adverse. That said, opportunities to exist in the junior sector even under more subdued investor interest."

Why Short Sector ETFs Aren't So Smart Part 1 and Part 2

XXSean's note -- this is an interesting analysis on RealMoney.com about short ETFs. I think the author makes some good points. On the other hand, everyone has their own agenda. And the fact is, as long as you use short ETFs for short-term investing (not long-term), I think they have real advantages.

Existing Home Sales Plunge in November

I still expect sales to fall further over the next few months, although inventory has peaked for the year.

Holiday Sector Performance Relative to the S&P 500 -- From The Big Picture blog ...