The bull camp has to be a little discouraged this morning with gold and silver prices falling back modestly in the face of a weaker dollar and disappointing economic data flows overnight. Perhaps it is possible that the metals are becoming a little concerned that the net result of economic developments will be for slowing conditions and not economic turmoil and that is typically bearish to precious metals and other commodities.

The gold and silver markets did leap sharply higher yesterday in the face of much softer than expected claims data and that could set up a similar reaction this morning if US nonfarm payrolls come in softer than expectations for a gain of 165,000. However after gold and silver markets ranged up sharply yesterday and fell back sharply from their highs that could be a sign that the markets have become overbought and or are waiting for the official statements from the trade talks.

Even though the Dollar rejected a washout and climbed back into positive ground yesterday, the dollar chart remains negative, economic uncertainty following US scheduled data has returned and gold is catching a lot of bullish press. In addition to positive press stories regarding surging Central Bank gold demand, the gold bulls are also embracing ideas that the Fed will be on hold for even longer. Going forward, gold should draft support from the World Gold Council comments this week that central banks added 651 tonnes to official gold reserves last year.

In fact, the WGC indicated that global central bankers bought the most gold in any single year since "1967". Furthermore, the WGC also noted improving demand for gold bars and gold coins last year and therefore the strong demand angle has certainty been given added breadth and credence.

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