Dec. 19 (Bloomberg) -- Gold swung between gains and losses in New York as U.S. lawmakers sought a budget deal to avert tax increase and spending cuts set to begin in two weeks.

President Barack Obama would veto a tax and spending proposal presented by House Speaker John Boehner because it would put "too big a burden on the middle class," White House Communications Director Dan Pfeiffer said today. The House may vote tomorrow on Boehner's "Plan B," which would raise tax rates on income over $1 million, rather than the $400,000 threshold the president proposed in his latest offer.

"Markets are headline-driven, and throughout the day we're getting differing headlines on whether there's progress" on the talks, Frank Cholly, a senior commodity broker at RJO Futures in Chicago, said in a telephone interview. "It throws a monkey wrench into things."

David Fuller's view As a gold bull, I hope this assessment above is correct but suspect that the supply / demand factors are somewhat more complicated, although I agree that fiscal cliff uncertainty is a factor.

In assessing gold and the three others precious metals traded on futures, I do not wish to engage in too much conjecture regarding the recent performance. However, in the ecosystem of global markets, gold and T-Bonds enjoyed a safe haven status while most investors remained worried about Europe, Japan, China and the USA. Both gold and bonds have weakened recently as stock markets surged, with serial laggard China finally breaking its sequence of nine consecutive lower rally highs since its monetary taps were turned off in July 2009.

Fullermoney remains overall bullish on stock markets, despite some short-term overbought conditions, because most remain in medium-term upward trends, albeit often with the help of quantitative easing (QE). Moreover, the recent surges in previous laggards Japan and China, fundamentally justified and extensively covered on this site, have understandably excited investors. As a consequence, safe havens have lost some of their appeal, but for how long?

Today, I will not say much more about US T-Bonds and other similarly-performing fixed interest markets, except to repeat that the 30-plus year total return bull trend is now a classic bubble, albeit still supported by QE.

Precious metals, which remain in a comparatively young secular bull trend, remain attractive as a store of value against a background of generally low interest rates and unprecedented amounts of QE. I would find it difficult to describe a more bullish background for hard money assets, although all markets are also affected by short-term human behaviour which is often mercurial.

I had hoped that gold would be closer to $1800 by the end of 2012. However, that is a personal concern and it is only completing the 16th month of another lengthy medium-term reaction, consolidation, and reaccumulation phase, in my opinion. There have been several, similarly lengthy pauses within this bull trend, averaging approximately 21 months before the earlier accelerated high was cleared.

However, the technical slide beneath the reaction low on November 5th has opened the door to some additional easing. On seeing a market encounter resistance at the higher side of its range, traders understandably question whether the lower side will be retested. Therefore, gold will now have to rally above $1800 to confirm fully a higher reaction low and additional evidence of overall accumulation. Meanwhile, gold has given up approximately half of its gains from last May's low which marked the beginning of a support building phase that eventually pushed the price back towards $1800.

Currently, gold is somewhat oversold and approaching the upper side of its earlier accumulation phase evident between May and August. Bearish commentators have been emboldened (hopefully a contrary indicator) but a break in the lower rally highs since October is now the minimum required to confirm that demand is re-emerging as the dominant force.

Incidentally, gold in particular and also silver are popular among HFT firms, because they are actively-traded international markets. This is less true of platinum and particularly palladium.

I think one gains perspective on seeing the charts of related markets, even though one may not be interested in all of them. On this evidence, my hypothesis that precious metals are back in an overall accumulation phase is being questioned by gold and silver, but certainly not palladium at this time, and to a lesser extent by platinum.

Meanwhile, I will utter a sigh of relief and raise my glass in a toast to all subscribers who are also long precious metals, once gold is clearly finding support above $1800. That should open the door to a run well above $2000.