While yesterday's sharp gains in gold and silver were partly supported by outside market action (lower treasury yields, a weaker dollar, and renewed US rate cut hopes), we continue to think there are classic flight to quality buyers moving into gold and silver as hedges against a geopolitical or financial market crisis ahead.

Even though the prospect of a significant crisis and the potential flight to quality influences from a crisis, gold has displayed significant corrective action in the face of the escalation of the Middle East conflict in the recent past.

However, ideas that runaway inflation was behind the recent record run-up in gold and silver prices suffered a significant blow yesterday when the US core CPI reading posted the first softening in six months...[MORE]

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