Gold ended the European session on Thursday unchanged in all major currencies.

Not even poor economic data from the US – plus news of physical buying in Asia this morning for jewelry use – could make up for the lack of dealers willing to deal this near to year-end.

Why risk the gains made since July? "Financial markets have achieved something akin to Nirvana in the past six months," says Mark Gilbert on Bloomberg. "The US bond futures contract has climbed 6 percent. The Standard & Poor's 500 Index has surged 14 percent. Gold has gained 8 percent...

"In the argot of traders, securities are priced for perfection."

But Gilbert fails to note that those gains are in US Dollars only. For non-US investors, bonds have dipped. The S&P has put on nearer 10% for anyone buying in Euros. And gold has gone nowhere since the end of June – despite violent trading in between.

Technical analysts at Barclays Capital reckon that gold buyers will show up around $605 to $614 per ounce as the markets slow further over the Christmas holidays. Prices will struggle above $632, they believe.

Reuters also notes that physical demand in India – the world's largest consumer of gold – will come in below 700 tonnes in 2006, thanks to a sharp 27% rise in the Rupee price since January. Last year, Indian demand was 7% higher at 750 tonnes according to the GFMS consultancy in London.

Could gold's success prove its downfall, while paper assets continue to rise? "It's all about Goldilocks and very little about the three bears," says David Bowers, a consultant for Merrill Lynch. He's just released the investment bank's poll of 210 global fund managers. They only see growth ahead in the bond and stock markets.

Sixty-three per cent of fund managers expect the global economy to weaken only "a little" in 2007. Some 91% think a recession unlikely.

"Financial markets remain stable, underpinned by the healthy global economy," reckons Yoshinori Nagano, a senior strategist at Daiwa Asset Management. "This is the time to take risks."

But US consumers are getting scared by the risks they've already taken, however. The University of Michigan's consumer expectations index has fallen in December to 78.6 from the November's score of 83.2.

Also today, the US Commerce Department revised third quarter growth in the US down to 2%, and said that new homebuilding had fallen at its fastest rate since 1991.

2007 could mark a turning point for the US economy. The economic pressures are matched by demographic pressure on its resources and finances, too. Click here to read more now...