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Clearly, the gold and silver markets are not benefiting from flight to quality interest early today as the fear of financial contagion in China continues to rise with Chinese equities plunging sharply this week. This is beginning to create "margin calls" which can prompt a chain reaction of problems for banks, investors, and eventually the government.

Sentiment toward gold early today is disappointing to the bull camp as a downside breakout in the dollar has not produced a wave of fresh buying yet.

In fact, it should be noted that the March dollar index fell below its 200-day moving average and posted a seven-day low in the early trade...[MORE]

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Gold prices steadied on Friday as investors braced for U.S. non-farm payrolls data later in the day that could give hints on when the Federal Reserve might start cutting rates, but bullion was still headed for its biggest weekly rise since December.

Spot gold was down 0.1% to $2,054.29 per ounce. U.S. gold futures were up 0.1% to $2,071.40...[LINK]

With the dollar posting a technical breakout on the upside this morning, gold and silver bulls are fortunate treasury yields have remained low overnight.

Global economic news overnight was mixed to slightly softer, which might be considered a negative to gold but more so to silver given its industrial focus.

However, the overriding weight on the back of gold prices this morning is clear sentiment from the US Fed chairman that a rate cut in their next meeting in March is not their base case...[MORE]

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Jan 31 (Reuters) - Gold prices reversed course and edged lower on Wednesday after the Federal Reserve Chair Jerome Powell pushed back strongly against expectations of a U.S. rate cut by March.

Spot gold eased 0.1% at $2,034.37 per ounce by 03:10 p.m. ET (2010 GMT) after rising as much as 1% earlier in the session. Bullion was down 1.3% this month but have held above the $2,000 per ounce psychological level so far this year...[LINK]

While the charts in gold tilt in favor of the bull camp, the upward bias is likely a simple drift toward the top of the last month and a half consolidation pattern.

Outside market influences early today are offsetting with supportive treasuries countered by minimal strength in the dollar.

The gold market is likely experiencing some headwinds following the release of the World Gold Council's latest report. In fact, global gold demand fell by 5% last year even without including the negative demand registered by outflows from ETF and OTC gold-based instruments...[MORE]

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