Just as I was about to enjoy the last day of what has been more work than vacation time, gold gets hammered on the back of news the punch bowl may be running dry. Throw in the fact that it always seems to get assaulted around the monthly employment report and one can certainly feel like its Deja-vu.

The latest plunge started yesterday when the Fed minutes showed some members want to be able to slow or stop their purchases well before the end of 2013. Others didn’t see a need for a specific timeframe for ending what we know as “quantitative easing”

Forgetting for a moment that other governments are still stimulating their economies like Japan (will likely increase its inflation rate by increasing asset purchases while adding to fiscal stimulus) and China (which plans to increase infrastructure spending and sustain loan growth), it’s a fairytale to think the FED can actually do anything but keep its foot on the gas pedal.

Why? The United States is up the creek without a paddle. Its political process has blown up and the FED knows the inmates are now running the asylum that’s responsible for fiscal policy. Because Ben Bernanke painted the FED into the corner and has run out of paint, he and his entrapped group has sent a “Hail Mary” towards the front door of the asylum letting the inmates know the punch bowl has no more kick to it and they somehow need to pull a rabbit out of the hat and get serious on deficit and entitlement reduction policies.

If you believe the inmates will do so and the FED can and will actually drain liquidity (allowing interest rates to rise due to actual tightening) well, I not only have a bridge to sell you but would urge you to stop reading this blog immediately.

Gold has been in a trading range of $1500 – $1800. It shall be pressured for the near-term and can retest the lowest part of the range. But after a decade of overcoming an overwhelming number of anti-gold waves from the investment community and the media that follows it, I believe this is just another bump in the road that leads to a $2,000+ gold price in 2013. The fact that such a view seems as far-fetch as a rookie winning the Super Bowl this year at the start of the NFL season, I’ll remain on board the mother of all gold bull markets and hope I’m not related to Captain Edward Smith.