As a top flight American delegation goes to china on a mission to save the once almighty dollar this is a dangerous time for gold.

The Chinese are sitting in a pretty good position at the moment with no real reason to grant the USA any of its wishes this Christmas. Here at gold prices we would like to see an orderly devaluation of the dollar not a dramatic dive as the financial world is fragile enough at the moment without getting a major kick in the teeth.

As gold bugs we want to see gold go higher but not at great expense to the masses. We must hope that this delegation is savvy enough to persuade China that a dollar crash is not in anyone’s interest. However should the dollar flirt with the ‘80’ level there will be those who will flee the dollar at any cost!

Stay with your gold stocks and hold on this may not be pretty and you do need to protect yourself from what is coming.

18 December 2006