Equity Indices and GOLD Continue to Diverge

The implication of a disinflationary or, perhaps worse, a deflationary commodity-price spiral has pressed spot-Gold prices back towards a test of critical Oct-Nov support at $1260-$1250, which must contain the selling pressure to avert downside continuation towards $1200-$1180 thereafter.

Only a climb above $1288-$1294 will repair some of the near-term technical damage.

Meanwhile, there is no such fear of deflation in the equity index, at least not yet.

That said, let's keep in mind that the only asset class that has managed to dodge a bout of deflation is equities. 

The Fed has done, and continues to do, everything in its power to prevent such a reaction.