Gold was supposed to be down huge once a debt ceiling deal was achieved - it appears that the DC clown show is nearing a deal but gold actually rose today:

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Gold_Daily_10.16.2013

For gold to break out of its 7-week downtrend we will need to see a daily close above $1300, however, today's small gain was very constructive and confirmed yesterday's bullish hammer candlestick higher. Perhaps most importantly we saw bullish price action in the face of news that was "supposed to be" bearish.

The market may be beginning to appreciate that not only will there be no Fed "taper" but also that the Fed simply doesn't have any endgame at all to its extraordinary monetary policy accommodations. As Steve Saville points out, the Fed is staying much too loose for far too long just as it has always done. The end result of every central bank engineered investment bubble has always been a bust, which inevitably sets the stage for the next major advance in gold. Shrewd investors will be adding to long term precious metals positions at current levels.