Sentiment towards bullion remains overwhelmingly bullish and further short-term gains are likely. A move up towards the February 1983 high of $509 an ounce seems the obvious target.
The sharp price falls have seen the beginnings of some bargain hunting by consumers and investors, although whether this will be enough to turn the markets higher remains to be seen.
The trade in the gold market is very, very thin, with gold off the lows and the highs of the day at $502/oz and $508/oz.
rise in inflationary pressures caused by higher energy prices.
The activity in the bullion market remains very impressive, with aggressive buying of any dips and a dearth of selling in the rallies helping to create a bullish chart pattern of higher lows, and higher highs, thereby attracting more momentum-based fund buying.