Gold was sharply higher in the far East, reaching nearly to $805 before London opened and sellers pushed it back to $790, but then it got a second wind in New York, rallied up to a finish at $798.70, up $12.40 from Friday. Overnight, gold has drifted lower.

Platinum also surged in Hong Kong, but was whacked down in Europe, then traded with a modes up bias in New York, ending at $1377/oz., up $20. Overnight, platinum is sharply lower.

Silver pushed past $13.30 in Hong Kong, retreated into the second hour of New York trading, rallied to the NYMEX close, then drifted lower in the Globex to close at $13.03/oz., up 36 cents. Overnight, silver has edged higher.
(Click here for charts)

Precious metals fanciers were probably breathing a sigh of relief that there was no continuation of last week’s debacle, but for the first time in a while the usual suspects lined up in their favor, with the dollar falling, oil rising, and equities selling off.

But Kitco’s Jon Nadler continued to press the bears’ case, writing that, “At the end of the day, while some buyers (investment funds) had pushed gold prices beyond the proverbial envelope’s limits, others (and perhaps the more important ones to this market in a historical sense) had held back and dug in until the prices tags started to show relief.”

Nadler added that, “Short dollar positions have been unwinding, long metals positions have seen the same … Damage control is now in full swing among some of the bullion market’s televangelists.”

Gold bull Mark O’Byrne, of Gold and Silver Investments Ltd., countered by saying: “Much of the financial media is once again heralding the bursting of the ‘gold bubble’ or ‘precious metals bubble’ and many seem to think that this is the end of the bull markets in gold and silver.”

O’Byrne noted that “fear is at levels not seen so far in this bull market and this should see prices bottoming in the coming days.”

And O’Byrne reminds us that the last time we encounted this “level of fear and oversold conditions was in June 2006 when prices had fallen from $730 in May to $542 in June or a drop of some 35% … At the time, there was a chorus of naysayers who gleefully called the end of the gold bull market. Prices subsequently nearly doubled in the next 2 years.”

For some additional perspective, it’s well to remember that a year ago, gold was trading at $670/oz.

“The events of a few days, or even a few months, do not necessarily undo what is so far an event that has been going on for seven years,” said George Milling-Stanley, a director at the World Gold Council. “A bull market can stand a correction of 30% in the price from time to time and still remain intact.”

Source: Rebound – Buyers Return to Precious Metals, albeit not Overly Enthusiastically