Apparently the gold market this morning is still generally discounting potentially threatening action in the US dollar as prices have remained near yesterday's highs.

In fact the gold market has also discounted a series of slightly higher gold output readings from a series of miners from quarterly statistics. However news that Chinese January through March gold consumption increased by 0.69% on a year-over-year basis combined with evidence of a 5.5% year-over-year decline in Chinese gold production shifts the classic fundamental condition slightly in favor of the bull camp.

Unfortunately total ETF gold holdings fell yesterday by 40,515 ounces which reduces this year's net purchases to 174,625 ounces. In the end the gold market had a pretty impressive rally on Wednesday, especially considering that the dollar traded to its highest level since May 2017 and that ultimately favors the bull camp into the opening today.

It's possible that the bulls are taking some temporary encouragement from reports of fresh central bank buying as new figures from Russia show their central bank buying was 18.66 tonnes in March (628,000 ounces), bringing their total holdings to 2,167.91 tonnes of the precious metal as of April 1st. This comes on top of a report that Russia bought 31.1 tonnes in February.

There has also been speculation that India's central bank could end up buying 46.7 tonnes of gold in 2019, the equivalent of about 1.5 million ounces.

While gold might be generally standing up to the Dollar the action in the Dollar clearly increases the risk to gold longs.

The charts in silver remain bearish with this week's pattern of lower highs extending in the early going today. It should be noted that silver derivative holdings overnight increased by 57,650 ounces but that still leaves this year's net sales at 4.9 million ounces.

We invite you to subscribe to receive our more comprehensive market update delivered directly to your inbox.


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.