Gold dipped $2 per ounce in Asia today, pulling back from Wednesday night's high of $649 but holding onto the 7-week highs hit late in New York.
"There's selling interest from the physical side at around these levels," reckons Ronald Leung, director of Lee Cheong Gold Dealers in Hong Kong.
"I think gold will depend on the Dollar and oil price again. We can say there's some resistance at $650 to $652. The downside are the levels that we have seen last time at $638 to $640."
Gold didn't rely on a weaker US Dollar for its gains on Wednesday, however, and overnight it touched $640.77 per ounce in Hong Kong. Rising strongly against all major currencies even as the Dollar rose on the forex markets, gold priced in Euros has dropped just 50 cents from its peak yesterday of €500 per ounce.
It also hit a 4-month high against the Australian Dollar, and came within 25 pence of £330 per ounce – a level last seen at the end of November.
At these prices, "I can say we have profit taking from the physical side as well as short selling," another dealer in Hong Kong told Reuters earlier. "I also heard there's speculative selling in mainland China."
"But I am still a bit bullish. It may try to test $650 later."
Short-term traders may be best advised to take a position before New York begins trading at 13:00 GMT today. So far this year, the US session has accounted for the vast bulk of gold's daily gains, breaking the commonly-observed pattern of strong Asian demand followed by weak European and US trading.
"The crude oil price is the main factor driving the gold market at the moment," says Kelvin Koh, a trader at Ong First Tradition in Singapore. "Investors' sentiment in the gold market has improved, but the market overall is looking for the oil market for direction."
BullionVault says that's simply untrue. Rising oil prices and the sudden surge in gold's bull market this last week have not moved in lock-step.
Gold is rising thanks to its own supply and demand dynamics. For a full report, click here now...