We probably need to keep an eye out for bigger moves in the gold market as they could have ramifications for the FX market. China and India remain consistent buyers and it was interesting to see the Chinese trying to talk the price down last week. Hedge funds are reportedly selling out of their strategic long positions yet the price is far from collapsing. There is a growing feeling that the new emerging economic powerhouses are looking to increase the percentage of their reserves in gold rather than relying completely on international government paper.
The levels to watch are $1050 and $1150 and a clean break either side will probably usher in the next big move.
