Certainly the action yesterday in gold provided fodder for both the bull and bear camps as a new six year high emboldened the bull camp at the same time the reversal from that high provided hope for the bear camp. Unfortunately for the bull camp the markets must see consistent anxiety from noted losses in equities to continue the gold and silver rallies straightaway.

The breakout up and reversal yesterday in futures was mirrored by news that gold ETF's sold 23,425 ounces from their holdings as that suggests some equity type investors were moved to bank profits. On the other hand, silver ETF's added 2.17 million ounces which brought their purchases this year to 110.1 million ounces.

It should also be noted that silver is beginning to get a chorus of bullish analyst forecasts suggesting the metal will begin to outperform gold.

In the near term the lack of clarity on the trend in trade talks is likely to narrow ranges but leave two-sided trading in place. It goes without saying that the record spec and fund long in gold from early last week was probably extended significantly into the Monday high, and that could feed stop loss selling today if the market shows signs of moderate weakness with a trade below $1,518.30.

In a slightly positive technical note, the big range up reversal in gold on Monday saw lower volume than during the major range up move on Friday and that could suggest the prevailing sentiment in the market still favors the bull camp.

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