Gold was up early in the overseas markets, fell off into mid-morning in New York, rallied back to peak at $890 just before the end of the Comex, then declined again through the Globex, finishing at $880.00/oz., down $1.10. Overnight, gold is slightly higher.

Platinum had a decent day, rising into the second hour in New York, before pulling back a little and trading sideways for the rest of the day, ending at $1175/oz., up $12. Overnight, platinum is sharply higher.

Silver traded all day between $12.20 and $12.40, zigging and zagging before closing with a slight gain at $12.26/oz., up 4 cents. Overnight, silver is little changed. (Click here for charts)

It was a very blah day for the precious metals as nothing much showed up to provide a sense of direction, with equities posting mild gains, oil bouncing back over $50, and the dollar static.

The reason why investors are buying gold, “fears of longer- term inflation and currency debasement, remain intact,” wrote John Reade, the head UBS AG (NYSE:USB) metals strategist in London. Once gold prices have stabilized, “we expect bottom-fishers to begin the next cycle of investment.”

But in the meantime, opposing forces are contending.

As Dan Norcini, writing on jsmineset.com, put it: “Gold is still caught in the tug of war between risk and risk aversion with traders unsure exactly how to trade it. Physical buying of gold from overseas, especially India, is strong below the $900 level but that is insufficient in and of itself to push prices higher. It can serve to put a floor under the market but to take gold higher, it is going to require strong investment interest. Interestingly enough, the reported holdings of the gold ETF, GLD, have remain fixed for some time now.”

As far as silver goes, many are looking for it to break out at some point this year, and the key may lie in some New York warehouses.

As Norcini wrote: “Silver drawdowns out of the Comex continue on their torrid pace with another 2 million ounces coming out yesterday. Whoever is taking the silver out of the HSBC (NYSE:HBC) warehouses has managed to draw down stocks from near the 80 million ounce mark (registered category) in December of last year to yesterday’s 63 million ounce mark. That is no small feat.”

Norcini goes on to speculate, “I think it no coincidence that the reported holdings of the silver ETF, SLV, have also shown a reported increase since the first of this year of some 52 million ounces.” If there is a connection, that would be most interesting.

Source: Precious Metals Go Flat