Look for continued buying in the gold market coming out of China as that nation contends with serious inflation problems. Their version of the CPI showed a gain of 5.3% in April, down from 5.4% in March, but above what most of the market was looking for (5.2%). Keep in mind that real rates in China are currently negative on one year savings accounts.
This helps explain why gold is holding much better than silver right now. Silver is being seen as a speculators' playground while gold is keeping with its historic role as a safe haven. The reason for its downdraft today is related to hedge fund selling algorithms which blindly sell every single commodity across the board with no discrimination whatsoever.
Such things are welcome in Asia as opportunities.
Gold has bounced back above $1500 in late session trading as the session nears an end in New York. Silver is currently acting as a drag on gold but if it can hold above $35, gold should bounce moving into Asian trading this evening as the margin related selling winds down.
"When misguided public opinion honors what is despicable and despises what is honorable, punishes virtue and rewards vice, encourages what is harmful and discourages what is useful, applauds falsehood and smothers truth under indifference or insult, a nation turns its back on progress and can be restored only by the terrible lessons of catastrophe." … Frederic Bastiat
Evil talks about tolerance only when it’s weak. When it gains the upper hand, its vanity always requires the destruction of the good and the innocent, because the example of good and innocent lives is an ongoing witness against it. So it always has been. So it always will be. And America has no special immunity to becoming an enemy of its own founding beliefs about human freedom, human dignity, the limited power of the state, and the sovereignty of God. – Archbishop Chaput
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