As I’ve been saying, the tenor of the Gold market has changed in the past couple of weeks.  We are seeing more buying during the illiquid COMEX pre-market than we did before the bottom at $1550. This tells me that whoever is still trying to cap the price of gold it isn’t the same group as before.  The capping action now feels more desperate.  Stop-loss raids are being countered quickly and causing short-covering and retreating $10-15 higher than before.

The previous line-in-the-sand was $1585.  Now that is support and the new one is around $1598.  Again, this morning we saw a spate of buying which pushed the market back up to $1598 only to be met with a violent wave of concerted selling into that area until the results of the Italian auction hit the market.  The Euro weakened to a 3-month low and that caused Gold to settle down and retreat back near $1585 where it was held until the COMEX close, after which is steadily ground out minor gains back to $1589

Until we breach the $1625 level days will continue to look like this.  As long as we keep seeing daily breaks of the previous day’s high the market will trade with an increasing bullish bias.  But, admittedly, traders are very skittish about the 800-lb gorilla coming in an bombing them out of their positions.

The Euro’s weakness coupled with renewed Yen debasement is doing a good enough job of keeping Gold bottled up below $1600.  But I would be watching for a third attempt tomorrow depending on how the initial jobless claims number turns out.