Source: Financial Times, 8th November 2009

The announcement last week of India's official purchase of 200 tonnes of gold from the International Monetary Fund put an amphetamine-like push into the metal's price. Before that news, the recent rally to new highs seemed to be tiring out, with the technicians citing this momentum line rolling over from that support level. The combined increases in open interest in the gold futures, and the gold held by the exchange traded funds, have not kept pace with the accelerated rise in the price of the metal; in other words, we have seen a rally on (apparently) weaker volume. That may not bode well for a strong gold market in the near future.