While gold showed some reversal action yesterday it remains just above a failure point on the charts of $1318.60, the market remains within the very uniform March uptrend pattern.

Fortunately for the bull camp gold derivative holdings overnight increased to 52.4 million ounces versus 52.3 million ounces in the prior trading session as Russian January gold output was found to have increased by roughly two tons from year ago levels. It should be noted that gold ETF's manage their fifth straight increase in a row yesterday bringing their net purchases this year up to 1.2 million ounces.

Similarly the silver market should derive a very minor benefit from the fact that Russian January silver production fell by 31 tons from the same period last year.

The gold market could benefit over time from Indian government moves to establish "a gold board" to regulate spot exchanges, as that is a complete change of stance by the government which several years ago seemed to be working to discourage gold holdings and now might be facilitating gold ownership. In fact the Indian government indicated their goal of the exchanges is to make gold an "asset class".

While the gold market showed some reversal action yesterday, it is premature to suggest that its resiliency from the last four weeks has been lost. However, it would appear that the dollar is capable of tracking higher ahead despite slack US scheduled data, and that has to be discouraging to the bull camp in gold.

In other words the dollar seems to have managed to spin soft US data into a positive by the argument that soft data is fostering economic uncertainty flow to the Dollar, but that argument did not result in safe haven buying of gold yesterday!

Silver looks more vulnerable than gold over the last 24 hours, but UBS lent some support to silver with an upward revision in its six and twelve-month silver price forecasts. However, a failure to hold above $15.36 today in May silver would shift somewhat bullish charts into bearish charts.

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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.