Gold is testing back above the $1700 level after tests of the downside earlier in the week stalled ahead of the range low at 1672.68 (05-Nov low). We noted in yesterday's report that the high and low of the range were established on the 5th day of the previous too months. So far yesterday's low (also the 5th of the month) is holding and the gains today ease short-term pressure on the downside somewhat.

Both the BoE and the ECB held steady on rates, even as growth risks are clearly mounting. The ECB significantly lowered their 2013 GDP forecast to -0.3%, from the +0.5% prediction they made in September. Yesterday, the UK's Chancellor of the Exchequer delivered what the Wall Street Journal called "a triple whammy of bad news." George Osborne conceded "the economic recovery was taking longer than expected; that he would likely fail to meet a key self-imposed debt goal; and that government cost cutting would continue until 2018, three years longer than initially planned. At that point, the U.K. will have experienced eight straight years of austerity."

Both the euro and Sterling have come under pressure, amid rising expectations that these heightened growth risks will ultimately prompt the central banks to offer additional accommodations. ECB chief Draghi in his press conference revealed that a cut in the overnight deposit rate, which is currently at 0%, was discussed. He suggested that the only reason they didn't move this month was "conflicting signs" on the short-term outlook.

So as the ECB and the BoE contemplate additional measures, and in light of the RBA's recent ease, we also know that the Fed is of a similar mindset. Focus is squarely on next week's FOMC meeting. With Operation Twist expiring at the end of the year, I think it's likely that the Fed will announce its intent to restart outright Treasury purchases.

That becomes increasingly likely if there is a bad nonfarm payrolls report on Friday. At this point, surveys suggest there will be a small rise in payrolls of 110k and the jobless rate will remain steady at 7.9%. However, the affects of Hurricane Sandy have resulted in a fair amount of uncertainty. Gallup daily tracking interviews suggest scope for upside surprise tomorrow with potential for a rebound in the unemployment rate to 8.3%.