The path of least resistance in gold is down with hawkish dialogue from the Chicago Fed President yesterday, November Swiss gold exports dropping 28% (mostly because the world's second-largest consumer India imported 67% less gold from Switzerland), and a lack of corrective action in the dollar following last weeks compacted rally.

However, an offset to the negative demand signals from declining Swiss gold exports is the fact that Chinese purchases from Switzerland increased by ten percent on 25 tons in sales versus the lower 16.4-tonne sales to India.

With both volume and open interest falling off and given the reversal from last week's highs, we suspect the bullish bias from last week has run its course...[MORE]

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