We’ve commented that an off-radar risk to gold is the hard money inclinations of the Republican leadership.  A Republican House in the next Congress is a done deal according to the prediction markets.  Intrade gives the scenario a 75 percent probability.

Rep. Eric Cantor,  the miniority Whip and “Young Gun”,   is the assumed heir apparent to John Boehner, who will become Speaker in January.  He’ll have tremendous influence on policy and strategy and we caught a glimpse of his view on monetary policy on the Kudlow Report a few days ago,

Kudlow:  Let me ask you one more….. The Federal Reserve , Mr. Cantor, is fixing to start pumping more cash into the economy and, as sure as we are talking tonight, that is going to deliberately sink the dollar, which was the same mistake we made in the middle 2000’s that exploded assets and energy and gold and oil at 150 bucks.  Do you, or anybody else in the GOP caucus, do you ever think about a stable dollar, linked to gold, stop the Fed’s destruction of our currency?

Cantor:  A lot of us our concerned about a weak dollar….There is no question, coupled with the fiscal policy of this Obama administration, and a more active Federal Reserve at this point raises an awful lot of concerns in many, many minds in Washington.  – 6:23 minutes

There you have it.  Not that they’ll stop the printing press, here, Japan, or elsewhere, but as the rhetoric heats up closer to the election , it could cause a nice correction in over bought commodities, including gold.  We’re not trading on it yet, but keeping it on our radar and will be looking to buy the pullback.