| Everyone is skeptical on the recent strength in metals. Gold continues to buck the stronger dollar, placing itself more in the role of a safe-haven asset than a dollar commodity play. The continued drop in oil, within a whisker of our $44 target overnight, continues to pressure equity valuations, and capital flows continue to surge into metals and U.S. bonds. Physical offtake in Europe is approaching record levels and funds managers on this side of the pond are again re-entering the GLD. Technically, a close above the $1,239 level sets the test for $1,254 range, which if broken, in the context of weaker oil and equities, could set the stage for a significant pop as the bears begin to capitulate. Gold continues to be a buy on any pull-back, unless the $1,222 level is lost. |
