While the gold market failed at a series of key chart points yesterday, and has initially forged a lower low for the move, the dollar has weakened and gold has managed a bounce of eight dollars an ounce.
While gold has not been a benefactor of geopolitical safe haven recently, increasing tensions between India and Pakistan combined with the abrupt end to the US/North Korean negotiations appears to have interjected some measure of buying into both gold and silver.
From a psychological perspective the gold market could be minimally held back today by reports that Venezuela might be in the process of selling 8 tons worth of gold (6.2 million ounces) from its central bank in an effort to provide the regime with capital.
Another element that could have undermined the bull camp overnight, but hasn't yet is news that South Africa's labor court has ordered the unions to "suspend" their strike action that was scheduled to begin today. Apparently up to 11 mining companies were expected to join the strike today.
As for the dollar it sits at the lows of the day early on and near a fresh downside breakout point of 95.75 and that action should be watched closely into an avalanche of US scheduled data at 7:30 this morning. In fact yesterday the dollar rallied off its lows because of the stronger than expected US pending home sales readings yesterday and therefore data today is critical to the trend!
While the North Korean talks have not shown a definitive impact on gold and silver prices over the last several days, the market yesterday appeared to pull safe haven premium from gold prices and therefore gold deserves geopolitical recovery today.
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