Obviously, the killing of Iranian military leadership has stirred uncertainty and anger in the Middle East and that in turn has sparked fear throughout the marketplace this morning. Not surprisingly the Iranian's have threatened to retaliate against the US with the Iraqi Prime Minister also suggesting this could "light the fuse of war" in the region.

While the gold market could be held back by the two-day recovery in the dollar, evidence of weakness in Chinese November gold imports from Hong Kong and news from yesterday that Indian gold imports last year declined by 12% over year-ago levels, the market instead has fully embraced a flight to quality/safe haven focus.

Yet another negative in the last 24 hours for the gold market came from the US Mint which indicated gold coin sales last year were the lowest on record. However the soft demand evidence this week is a backward look at demand sectors that were not expected to lead the gold market higher in 2020.

In fact, gold ETFs increased their holdings yesterday for a 6th straight trading session with the addition of 100,311 ounces.

Unfortunately for silver bulls, silver ETFs reduced their holdings by 616,294 ounces which brings the net two-day sales tally for 2020 up to 1.7 million ounces.

Going forward the trade will focus on the Middle East and the action in the crude oil market which overnight posted gains in excess of $2.70. It is possible that additional stimulus from China, recent signs that the dollar has entered a downtrend and a sustainable safe haven condition has set the stage for a return to the 2019 highs up at $1,571.70.

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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.