Gold knocking on the door of resistance at $1750

One thing in particular that really stands out to me in today's trading session is the resilience of the gold market even as the safe haven trades were being put back on by a decent sized contingent of traders. The Euro got knocked down about 50 points and the US Dollar saw a pop higher as traders were expressing signs of nervousness over both Greece and now Portugal. Additionally, the long bond rallied up nearly a full point and is once again at the top end of a trading range that is now three months in duration.

This combined with the fact that Euro Gold is extremely strong tells us that gold is attracting a fairly large amount of safe haven flows itself and is not being impacted all that much by the risk aversion trades which hit silver, copper and platinum today. If this sort of thing keeps up, it will make it much more difficult for the bears to prevent $1750 from being breached.

A strong upside breach of $1750 should clear the way for a run at $1775 - $1780 which will also be heavily contested by our pals at the bullion banks. Downside support should emerge first near $1720 and then lower at $1705 should buyers decide to sit on their heels a bit.

The yield on the Ten Year note CLOSED at an all time LOW. The yield has moved lower but has never CLOSED for the month below 1.80% before. It is evident that the FOMC news from last week continues to have a profound impact on these markets. Inflation is not the primary concern of bond traders at this point.

Silver has run into a bit of difficulty clearing the $34 level as it has hit this level or near there for the last three trading sessions but has been unable to decisively push through. It will take a lessening of concerns associated with European sovereign debt for silver to run through this barricade and try for $35.