After an overflow of bullishness at the beginning of the New Year, the gold market has entered a broad trading range between $535 and $570. This is allowing a very overbought situation to correct itself and set the groundwork for an assault on $600 this spring.
The U.S. dollar counter-trend rally is over and a resumption of the secular bear market is under way. This and geopolitical news out of the Middle East are the fuel for a run to $600.
Strong physical and investment demand, increasing geopolitical concerns here and abroad and the likelihood of a resumption of the bear market in the U.S. dollar, are all factors that should drive gold towards its all-time highs.
Anyone still not yet on board the secular bull market in precious metals are being left in the dust.
China's announcement of wanting to diversify their foreign-exchange reserves holdings is going to have a profound effect on financial markets worldwide.