Gold continues to pussyfoot, failing to launch toward a 1014.70 target even when the global financial system was teetering on the brink earlier this week. Could bullion be reading a deflationary outcome from any bailout attempt? It is a possibility that we cannot afford to ignore. Although I still believe gold will outperform all other investables in a crisis, be it inflationary or deflationary, it makes sense to hedge the downside so that we can comfortably hold a long position even in the most adverse circumstances. In practical terms, that implies buying insurance at targeted rally tops. For now, however, I’ll stick with my earlier stipulation that December Gold close for two straight days above 921.60 before we infer that $1,000+ is a done deal. _______ UPDATE: Gold was getting shredded overnight on news that the Senate had passed the bailout package. The dollar was higher, presumably with the unsubtle, coerced support of Japan and Europe, but stock index futures appeared to be struggling to get back to even. As of 3:40 a.m. EDT, the December Comex contract had traded as low as 867.40, a tad shy of a midpoint pivot at 862.70 that we can use as a minimum downside objective. A decisive breach could spell more weakness over the near term to as low as 826.80. ________ FURTHER UPDATE: Gold fell hard and was down more than $50 at one point, but it didn’t quite get down to the target, turning instead from 833.50. This is a speculatively bullish sign, but we’d need to see a print at 855.70 by week’s end to infer a probable resumption of the bull cycle begun three weeks ago from 739.80.