With an extension down and five day low in June gold the sellers start the Thursday US trade in control. Clearly strength in the US dollar continues to foster long liquidation throughout the metals complex. So far, the washout in gold today does not appear to be gaining aggressive momentum but we can't rule out a quick decline to the next support level down at $1309.10.

While exchange traded gold funds saw an inflow of 10,219 ounces overnight, net purchases this year have reached 1.21 million ounces and there have been six straight daily builds in holdings, but that news is hardly capable of supporting prices in the current situation.

Silver ETF's also saw an inflow of 16,360 ounces but that leaves this year's net sales to 5.9 million ounces.

In the end it appears that gold and silver are being undermined by escalating slowing fears, dollar strength, and broad-based commodity market liquidation, and those conditions might not end quickly. It should also be noted that the June gold contract failed yesterday at the 50 day moving average of $1315.80 and therefore that level could be a critical bull/bear line today.

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