Gold prices picked up where they left off in 2003, making holiday mincemeat of the $420 level, and settling at a price that we haven’t seen since the first Bush administration. The Euro hit an all-time high against the dollar yesterday of $1.27 and the British pound reached $1.80, as the US currency continued its fall against pretty much all measures.

US Treasury and Federal Reserve officials continue to weakly bleat that a ‘strong dollar’ policy is in place. In a parallel universe, the front office of the Detroit Tigers will this spring contend that the Tigers look forward to being in the playoffs come September.

There’s no doubt a lot that could be written about this delicate juncture of gold versus the dollar, and better writers and smarter people than me no doubt will do so. This extremely busy bullion dealer just doesn’t currently have the time to try.

I’ll leave it to Richard Russell to summarize – Marketwise, I think he hits the nail right on the head:

“As for the gold action, I like it. A powerful upward surge, a spike in gold, would bother me. The best action for those of us who hold gold and gold shares is a measured, cautious, step-by-step rise. Nothing to excite the retail public. Nothing to make the pros feel that they are missing anything. So far, that's what we've got. So far, that's the way both gold and silver are "playing the game."”

“Meanwhile, the dollar continues to sink to new lows against its main competition - the euro. So far, the market is taking the declining dollar in stride. What me worry? The dollar is going down in "baby steps" the same way gold is going up - in "baby steps." Gold isn't exciting anyone, and neither is the sinking dollar.”

In short, we still have a stealth gold market, being heavily sold into by US retail investors, and ignored by almost everyone else. And the longer those conditions prevail, the better it will be for our favorite yellow metal in the long run.