Gold had a choppy session yesterday with 266,000 lots trading in Comex December gold, the fourth highest volume day of the contract thus far.  Gold tanked $20 to start yesterday’s session after a poll showed that Swiss voters will reject an initiative requiring the central bank to hold at least 20% of assets in the yellow metal.  Despite the SPDR gold ETF adding to holdings modestly last week, overall holdings in exchange-traded products this week have slumped to a five year low.

As the session wore on yesterday, gold managed to recover from its earlier sell off.  Participants were cautious ahead of the FOMC minutes and then there was some volatile price action in the wake of them.  Nothing particularly groundbreaking was revealed in the FOMC minutes but it still managed to cause some jitters.   The USD remains near a 5 year high against a basket of currencies.

Even though ETFs continue to shed gold ounces, physical demand is picking up in the Far East.  Switzerland was a net exporter of gold in October for the first time this year with most of it heading to China, Hong Kong and India.  Resistance in gold is coming in at $1,200, a psychological level gold has broken twice, but not closed above, in two of the past three trading days.   Silver hasn’t done much of note since breaking above $16 last Friday.  It has formed a base at $16 over the past three trading sessions though and investors have been adding cautious long positions ahead of this support level.