While the action in gold was ultimately nondescript yesterday, the market did make initial gains in a fashion that seemed to rekindle last week's recovery mentality. The gold market continues to claw its way higher this morning with another higher high for the move and a three day high early.

While the declines in the US dollar are not significant overnight, the dollar charts read negative and appear to be projecting further downside work.

The Indian government has promised to reform the gold trade into a more formal system with policies to spur physical gold trade, facilitating gold as a financial asset, establishing a gold regulator and those moves might increase the countries clout by concentrating gold activity. Certainly the policy changes won't translate into stronger near term gold demand but the net result could eventually reform the world's second-largest gold market into a more important demand force.

Overnight holdings gold derivative holdings increased by 280,000 ounces while silver holdings increased by only 116,000 ounces.

In another supportive development overnight the IMF has indicated five central banks have increased holdings of gold while Turkey and Mexico actually cut their gold reserves in recent statistics.

Gold might draft some support from higher Swiss gold exports especially with exports to India jumping by 137% on a month over month basis. However countervailing the jump in Indian Swiss gold imports from Switzerland is a 57% decline in the Swiss gold exports to China.

From a technical perspective, the gold market has continued to respect a classic uptrend lines on its charts for most of March (following the initial washout earlier in the month) and the upward motion in prices has been accompanied by a steady buildup of open interest. Seeing open interest rise on a rally should suggest the bull camp is maintaining a technical edge.

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Non-Reliance and Risk Disclosure: The opinions expressed here are for general information purposes only and should not be construed as trade recommendations, nor a solicitation of an offer to buy or sell any precious metals product. The material presented is based on information that we consider reliable, but we do not represent that it is accurate, complete and/or up to date, and it should not be relied on as such. Opinions expressed are current as of the time of posting and only represent the views of the author and not those of Zaner Financial Services LLC, unless otherwise expressly noted.