Gold was dead flat from Hong Kong to mid-morning in New York on Tuesday, after which it staged a modest rally to finish at $907.90/oz., up $10.60. Overnight, gold is pushing higher.

Platinum traded very tightly, never straying much from the $1040-1050 range, and ending at $1051/oz., up $10. Overnight, platinum is little changed.

Silver mirrored gold for the second straight day, taking off higher from the same flat mid-morning point and pushing into positive territory to close at $12.77/oz., up 20 cents. Overnight, silver is trending higher. (Click here for charts)

The precious metals had been doing a good bit of backing the first two days of the week, and yesterday turned around to do some filling.

The usual suspects played little part in providing a sense of direction, with both the dollar and oil falling and equities rallying for a second day. But there is probably more than a little sentiment out there that gold has been oversold, and many are likely looking at $900 as a psychological floor.

The Hightower Report wrote of the day’s action: “The gold market came back alive after a retest of the vicinity of the prior session’s lows. With a reversal in the equity market and a noted slide in the Dollar perhaps the gold bulls are regaining some sway. Given the periodic retest of the 88.00 level in the March Dollar Index recently, that level might be considered a key point for the gold bulls in the coming trading sessions. Clearly the gold market was emboldened by the weaker Dollar, especially since the gold market managed the gains in the face of a serious setback in energy prices. Some traders suspect that comments from the US Treasury Secretary that the global recession was deepening rekindled some flight to quality buying of gold. Perhaps seeing talk of implementing mark to market accounting the second quarter increased concerns that even more financial sector problems would be found.”

Technicians are cautious. “Given improvement in risk appetite and absence of significant ETF inflows we could see the metal extend lower to target technical chart support around $883,” wrote James Moore, analyst at TheBullionDesk.com.

While long-term gold fundamentals appear sound, fund participation may be required to give the metal any kick-start going forward. The recent rally to $1,000 “exhibits the unmistakable footprints of speculative hedge funds,” said Jan Nadler, senior analyst at Kitco Bullion Dealers.

Nadler came to that conclusion because “the buying stopped suddenly, and ETF holdings grew no further — this, despite no material change in global macro conditions.”

Source: Gold Rallies Back Over $900