In our opinion, it was a major failure for the gold market to sell off in the face of another collapse in equities on Tuesday. In fact, we see the action again this morning in gold as very damaging to the bull case as it would appear that gold needs a clear sign of a pandemic and clear signs of severe global slowing to ignite a return of aggressive investment buying.

The trade could be fearful about the potential for a sustained setback in Chinese physical gold purchases and while we have no credible evidence of this, it is possible that China could be selling gold from its central bank holdings to fund activity to stimulate its economy.

Furthermore given significant palladium strength on Tuesday, it almost seems like it has become the safe-haven of choice instead of gold.

However, it should be noted that ETFs increased their gold holdings for the 25th straight day bringing this year's net purchases to 2.93 million ounces and that inflow was very significant as it was the biggest inflow since the beginning of the headlines on the virus outbreak. Other stories have pointed out that gold-backed ETFs are seeing an unprecedented inflow which should leave that long-term investment-driven bull market hope alive.

Not surprisingly May silver performed poorly as well yesterday gapping lower and trading back into the range up day from a week prior as it clearly rejected Monday's high move. Fortunately for the bull camp May silver appears to have found some support at $18.00 but pushed into the market we see silver behaving as an industrial commodity facing recession unless gold prices began to lead again with very strong gains.

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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.