While the gold and silver markets initially held up impressively in the face of strength in the dollar yesterday, ultimately they faltered and have extended into further new low for the move ground this morning. Obviously another sharp range up extension in the dollar and the highest trade in the Greenback since January 1st gives rise to the prospect of more range down action in gold, silver and other commodities directly ahead.

While the safe haven angle hasn't been a prominent force in daily price discovery in gold recently, confirmation of a high-level trade meeting next week certainly fosters safe haven liquidation. Other developments driving safe haven longs from the market was seen from upbeat economic comments from the US Federal Reserve Chairman yesterday and fears of large declines in both claims and ongoing claims later this morning.

In a minor supportive development overnight Zimbabwe January gold output came in below year ago levels. While the gold market did draft some support from industry talk of more merger/acquisitions in the mining space, news of further declines in gold and silver derivative holdings overnight highlights declining faith in gold and silver from investors.

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