1. Seasonality
Per Barclays, "Approximately mid-Nov to early Dec is a strong seasonal time for gold with an impressive track record over the past three decades."
2. Liquidity and inflation
Central banks around the world won't easily be able to exit the vast amount of liquidity they've pumped into their respective economies w/o any price. Here is the catch: "Inflation remains a real concern." That should mean continued support for gold, often used as an inflation and dollar hedge and more broadly seen as an alternative currency. As investors flee the $, they are moving into higher yielding currencies, hard assets like gold and other commodities as well as equities.
3. Risk preference
Bernanke's assessment of the economy of today reinforced a view that the Fed will likely keep US interest rates at ultra-low levels for an extended period. Despite weak US consumer confidence data, risky assets such as equities and commodities have rallied. Liquidity seems to have drowned the market's fears. The lower dollar and rising risk appetite also boosted other precious metals. Although gold put in strong gains, silver, platinum and palladium, which are more heavily used in industry than gold, advanced more in % on the weaker greenback combined with economic and automotive news.
4. India / China effect.
India bot 200 tons of gold at $1045. Now the world is eyeballing at China. Currently China has only about 1050 tons of gold, or $37b, or <2% of the reserve. The question is should they buy it at this high level? This is another test that the Chinese gov needs to face now.
5. USD: I am expecting a new low THIS WEEK. I think 74.8 cannot hold.
6. Chart reading
macd strong with expanding histogram, break upper bol, sto overbought but no big deal
This week's target 1150 with support 1128. I will buy dip at 1113.
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