The gold market today starts out with a slightly positive track with news flow on the trade situation favoring uncertainty and the dollar posting very minimal weakness. Clearly the gold focus this week has been centered on safe haven from trade and not on the ebb and flow of the dollar.

However dollar action this week has not yielded much in the way of direction with a tight sideways coil and therefore the question of the dollar's importance on gold prices is unknown at present. Another outside market force that has been discounted or ignored is the fact that a 10 year Treasury note auction yesterday was the weakest in 10 years.

Seeing the President in a campaign rally indicate that China "broke the deal" could have the impact of discouraging China from negotiating in the coming two days. At this point we suggest a deal in the coming 48 hours appears to be highly unlikely.

While the gold market did not benefit from the strong demand news flowing from the World Gold Council recently it should see some support from overnight news that South African gold output in March declined by 17.7% on a year-over-year basis. The declines in South African gold production have become a solid fixture and would be lending significant lift if production outside of South Africa had not shown such significant expansion.

Another supportive supply-side headline overnight came from South Africa's largest gold producer indication that gold production may not return to normal until the third quarter of this year due to the residual impact of a five-month strike.

In a negative development and a backtrack by the Indian government an Indian official overnight seems to have thrashed the hope for a gold customs duty reduction by claiming once again that such a move would widen the current account deficit and reduce gold imports.

Gold ETF holdings declined for the fifth straight day yesterday with a reduction of 59,696 ounces which brings this year's net sales two 650,235 ounces. On the other hand silver ETF's added 169,088 ounces but silver has net sales on the year of 564,931 ounces.

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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.