Obviously the technical action in the gold market yesterday and again overnight has been very discouraging for the bull camp, as the range down move has now pushed prices down to the lowest level since mid-month. In fact, the range was rather significant Thursday and volume picked up in a fashion that suggests a wave of longs is rushing to the exits.
Part of the washout in gold might be the result of a slight reduction in supply threats after a South African Court ruled against several Union strikes. Apparently chatter overnight of a slight increase in Asian gold demand, off recent the corrective action, has failed to cushion the market which in turn suggests many buyers on the sidelines want even lower pricing to be enticed into positions.
In retrospect the dollar appears to have seen yesterday's US growth readings as supportive and given the upside extension in the dollar and the potential for a consistent dollar index trade above 96.00.
Gold looks to be headed to the February low of $1304.70 and perhaps even 1300 in the event that US scheduled data later this morning results in a higher high trade in the dollar above 96.30. With gold continuing lower today, May silver might see a quick slide below $15.50.
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