Clearly, with the upside breakout extension overnight headlines in the Middle East continue to fuel both speculative and flight-to-quality buying of gold and to a lesser degree silver.

Unfortunately for the bull camp gold and silver ETF instruments continue to see outflows, with the outflows from silver instruments this week significant with year-to-date sales of 34.5 million ounces and yesterday the seventh straight daily outflow of silver ETF holdings.

In retrospect, with gold rallying in the face of an upside breakout in US treasury yields yesterday, the flight-to-quality theme is clearly dominating the trade and that should continue to lift gold, especially with expectations of Israeli troops moving into Gaza for what the media labels as a "ground war"...[MORE]

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