While the market is sitting just below the $700 psychological level for gold, we're more impressed by the price holding above our technical target of the $694-695 level.  $700 will get the headlines, but it's more important to see the technical levels hold up over a few days to underscore the strength of the market.

Following up on last week, we reiterate that the platinum, silver and palladium ETFs heading to the market from Switzerland won't move the markets as huge amount on their own, but the key will be what kind of follow up we see in other bourses and exchanges for additional, physical metal backed ETFs.  Seeing the announcement in London a day later and some possible other movements to get ETFs moving in other markets, the follow up is the key.  One small ETF in a small market is not a big impact.  Several small ETFs on several bourses becomes a much bigger impact on demand.  Also, I've gotten some questions about why a platinum producer would be against the creation of an ETF.  The only reason I can think of is that they're worried about if the ETF has too much success, pushing up prices too high and therefore causes platinum to be replaced aggressively in industrial uses by palladium.  Copper miners worry about the same thing routinely.  You want to increase profits, but you don't want to kill the goose laying the golden (or platinum) egg. 

Lihir Gold announced their completion of a cash raise to close out long underwater hedges in the market.  The company has not begun closing out those hedges yet, so we know at some point over the next few months the market will be experiencing nearly 1.5 million ounces from the demand side of the market to close out those hedges.  This is going to help create a great floor for the price along with any additional hedges being closed out.  Investors buy on the dips, companies close out hedges on the dips. 

Finally, we're heading into peak demand from the Indian wedding season.  Last year we saw prices during this time period go on nearly a $130 per ounce run in a three week period.  Instead of going parabolic and pulling back sharply, we've had a two steps forward, one step back move in prices, which will prove to give the market a great deal more support underneath it should we see a sharp upwards move followed by some consolidation.  Higher highs and higher lows.