Gold continued to move up after the New York close and unfortunately it appears to based on fears that the Taliban are increasing their influence in areas close to Islamabad. On checking on various news services the rhetoric between the parties involved seems to be mounting.
On Wednesday, Clinton warned in extremely strong language that Pakistan, the key US anti-terror ally, was "basically abdicating to the Taliban and to the extremists" with an agreement permitting Sharia law in the Swat valley.
Secretary of Defense Robert Gates backed up her words on Thursday, saying that Pakistan's leaders must act to stop the militants who have take. AFP Washington
This is an excerpt from Pakistan's Daily Times
ISLAMABAD: The Foreign Office (FO) has said that international conspiracies being hatched to malign and isolate Pakistan will not succeed.
Addressing a weekly press briefing, FO spokesman Abdul Basit criticised the ‘unwarranted remarks on Pakistan’ by the Israeli foreign minister, who has said “Israel feels a strategic threat at the hands of Pakistan”, not Iran.
“Pakistanis are a resilient, moderate and progressive nation, and efforts to malign or isolate Pakistan will not succeed,” said Basit.
He said that a recent meeting of the ‘Friends of Pakistan’ forum in Tokyo had clearly demonstrated that the international community fully supported Pakistan in the war on terror.
In a missive from Jim Sinclair:
This situation has gone critical here and now! The West will act immediately if we have a nuclear capable Taliban.
It is not standing weapons as much as the knowledge and raw materials for production that are the targets. This is a potentially world changing event that seems to not even be properly in focus today.
And finally a missive just received from Peter Grandich:
I believe one of the worst geopolitical bombs in decades is about to explode and it will have extremely negative implications worldwide. You must not take this lightly.
Gold bugs or not we all need to hope and pray that this situation can be diffused and that it does not escalate from this point.