While the gold market has shown periodic strength this week and has seemingly rejected the $1275 level on the charts as if that is some form of value, the early bias today liens in favor of the bear camp. As usual strength in the dollar would appear to be the primary culprit behind the weakness throughout the metals complex and it is possible that the dollar might extend further into and through the ECB results this morning.

However expectations call for increases in initial and ongoing claims and that could moderate the upward track in the dollar temporarily. Intensifying political conflict in Venezuela is a potential safe haven support for gold but currently that situation hasn't reached the breakdown point. While Goldman overnight trumpeted commodities as an attractive asset class and pointed to their interest in gold because of recent gold sector mergers, the gold trade this morning doesn't appear to be poised to embrace big picture demand hopes.

Several gold production readings were released overnight but the net impact from those production figures on prices should be mixed. Russian Polyus saw its 4th quarter production decline by 8% to 637,000 ounces, Kaz Minerals showed full year production to have come in above guidance at 183,000 ounces, while two other minor producers saw slight reductions.

In a minor negative development exchange traded funds reduced their holdings of gold by 2,742 ounces yesterday but their net purchases year to date remain at 1.3 million ounces. Silver on the other hand saw an inflow of 1.07 million ounces and that reduced the year to date "net sales" to 10.5 million ounces. Bloomberg reported the silver ETF inflow yesterday was the biggest daily inflow since November 13th.


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