Some are saying that high energy prices are inflationary which may cause some to once again look at gold as an inflation hedge. Don't count on such a simple relationship. Equities remain restless as one has to wonder if high energy prices are finally having an impact on the economy. Gold has channeled this month from 282.8 to 275.3, and two consecutive closes through either of those areas will add fuel to that particular direction. Keep in mind that the longer term trend is still lower, with a strong USD keeping a lid on gold prices.
Gold is now below averages, is trending lower, and tech indicators are weak.
Bulls should consider waiting on the sidelines until there are two consecutive closes above 280.9. In the meantime if you can't help being a bull, call options seem like the only reasonable path to pursue at this point. December Silver . Silver closed the session at 493.7, down 3.5 cents. With gold slumping silver bulls are struggling.