Gold had been working its way higher for about a week but found steady offers for three consecutive days around the $1,220 area.  The failure to break through this level encouraged fresh shorts to enter the market, propelling it lower over the past two trading days.  Gold shorts were also encouraged to add to positions on the heels of fundamental news coming out of India.  India’s Finance Minister Arun Jaitley maintained the 10% import duty on gold in the 2015 – 2016 federal budget.  Considering the improvements in current account and fiscal balances, there was widespread speculation that the tariff would be cut.  The government had also allowed more agencies to import gold in 2014 so the climate seemed friendly for easing on the gold front.  Market participants were disappointed with the decision and gold has tested lower as a result.

The USD Index reached an eleven year high yesterday against a basket of currencies.  US equities screamed upwards with the Dow making all-time highs yet again and the Nasdaq hitting 5,000 for the first time in 15 years.  Gold remains range bound with support at the double bottom of $1,190 and resistance in place at $1,220 – $1,225.  Silver has been unable to maintain its footing above its 100 day moving average of $16.63 and is projecting lower to $16.

With all that is going on in Russia (the biggest producer of palladium) these days, palladium has bucked the recent precious metals trends.  It has traded higher for seven consecutive trading sessions and made a strong move higher through its 200 day moving average yesterday.