GOLD CONSOLIDATES ON DEFLATIONARY PRESSURES

Gold prices edged lower Monday morning on the New York Spot Market as investors digested information from the Fed’s June 22 to 23 meeting, which suggested the possibility of deflationary pressures. While the Fed’s minutes show that several participants noted lower-than-expected inflation, participants also noted that the possibility of a potentially unsustainable fiscal position and the size of the Federal Reserve's balance sheet could boost inflation expectations and actual inflation over time. (The Street, 7/19/10)

Stocks are holding modest gains on the New York Stock Exchange after a report showed home-builder confidence is waning, which raised concerns about the economy ahead of this week’s second-quarter results from corporate America. The report heavily weighed on retail and housing related stocks, said Nick Kalivas, vice president of financial research at MF Global. "The economic news recently has been consistently surprising to the downside," he said. "That's making the market jittery." (CNN Money, 7/19/10)

Donald Luskin, chief investment officer of Trend Macrolytics, answered analysts that have continued to steer investors away from gold during its 10-year historic bull run in an article for Smart Money.
Luskin explains, “It’s been one of the best investments you could have made over the last decade.” He adds, “Today it costs about $1,200 an ounce. Did I mention that's quintuple the price of 10 years ago?” Turning his attention to gold’s long-term outlook, Luskin says, “I have no idea what it's going to do tomorrow or the next day. But I know that inflation around the world is an inevitability -- all the more so for all the talk now about deflation, because that's going to keep the Fed and the rest of the world's central banks pedal-to-metal on their printing presses.” (Smart Money, 7/19/10)