Gold prices continued to hover near $1,650 per ounce ahead of Tuesday's US trading – in line with where they have spent most of the last month – while European stock markets gained following Spain's successful auction of short-term Treasury bills.
"Gold remains in a bearish trend so long as it stays below $1,697, which was the most recent top on March 27," say technical analysts at bullion bank Scotia Mocatta.
Silver prices rose to their highest level this week – hitting $31.81 per ounce – while other industrial commodities were broadly flat and government bond prices fell.
Stockpiles of silver bullion held in Comex warehouses meantime have hit their highest levels in at least decade, according to newswire Reuters, which first began compiling the data 10 years ago.
"When you are seeing people delivering into Comex, it is typically because they have nothing better to do with the metal," explains David Jollie, strategic analyst at Mitsui Precious Metals in London.
"Generally if you are seeing Comex stocks building, you would say that means that premiums are not particularly high anywhere, and that means that demand is low."
The Spanish government saw its short-term borrowing costs rise Tuesday when it auctioned 12-month and 18-month bills. The average yield on 12-month bills was 2.623% – up from 1.418% last month. The yield on 18-month bills jumped from 1.711% last month to 3.110%.
Spain did however manage to sell €3.2 billion of debt – above the maximum target of €3 billion announced before the auction.
"The key was again domestic bank bidding," says Michael Leister, rate strategist at DZ Bank.
"But it doesn't change the bigger picture too much. The key will be the bond auction on Thursday."
Spain, whose banks were believed to be among the biggest borrowers at the European Central Bank's longer term refinancing operations (LTRO) in December and February, plans to auction between €1.5 billion and €2.5 billion in 2-Year and 10-Year bonds two days from now.
Spanish 10-Year bond yields rose above 6% yesterday, before easing back slightly this morning, while spreads over 10-Year German bunds hit their highest levels since November.
"The positive effect of LTRO operations is now well on the wane," reckons Lyn Graham-Taylor, London-based fixed income strategist at Rabobank.
"We are well and truly back in crisis mode."
The government in Madrid has said it will seize control of the budgets of Spanish regions if they fail to stick to deficit limits, as prime minister Mariano Rajoy's government seeks to bring Spain's deficit down to the target of 3% of GDP next year, as agreed with the European Union.
Spanish debt is now the tenth riskiest sovereign debt in the world, according to a new report published by data analysis firm CMA Vision.
Inflation in the euro zone as a whole meantime, as measured by the consumer price index, held steady at an annual rate of 2.7% last month, official data published Tuesday show. Core CPI – which excludes items such as food and energy – ticked higher, from 1.5% to 1.6%.
Here in the UK, CPI inflation rose to 3.5% last month – up from 3.4% in February.
The London Metals Exchange, which specializes in trading non-ferrous base metals, is reportedly considering offering settlement in Chinese renminbi. Contracts are currently denominated in dollars, euros, yen and sterling – with the LME said to be considering dropping sterling.
Over in India, traditionally the world's largest source of gold bullion demand, jewelers are reporting a 50% drop in sales ahead of next week's Akshaya Tritiya festival – seen as an auspicious day in the Hindu calendar to buy gold.
"Around this time, we [usually] sell 500-600 kilograms of gold daily," former Bombay Bullion Association president Suresh Hundia, told the Wall Street Journal on Tuesday.
"But this time, purchases are down to 200-300 kilos."
Indian jewelers staged a three-week strike recently following the Union Budget of March 16, which extended the reach of sales tax on gold as well as doubled gold import duties.
India's central bank meantime cut its main policy interest rate today from 8.5% to 8%, the first cut in three years, citing a slowdown in economic growth.
"Upside risks to inflation [however] persist," the Reserve Bank of India warned.
"These considerations inherently limit the space for further reduction in policy rates."
The RBI also announced it has tightened its stance on gold lending companies, and set up a working group to look more closely at the industry.
Ben Traynor is editor of Gold News, the analysis and investment research site of gold ownership service BullionVault. He was formerly editor of the Fleet Street Letter, the UK's longest-running investment letter. A Cambridge economics graduate, he is a professional writer and editor with a specialist interest in monetary economics.