The wholesale silver gold price rallied from 6-week lows Wednesday morning in Asian and London, recovering 2.1% and 1.0% respectively as world stock markets also bounced.
Crude oil recovered from a 2-week low at $105 per barrel, but the European single currency failed to hold an early rise ahead of Thursday's Greek debt-restructuring deadline.
Germany today reported a sharp drop in new factory orders, down almost 5% year-on-year in January.
Private-sector US payrolls rose faster last month than analysts forecast, up by 216,000 on today's ADP report.
The official US Non-Farm Payrolls report – often a volatile event for currencies and the gold price – is due Friday.
"Another medium term top has been formed [in the gold price]," reckons technical analyst Axel Rudolph in London for Commerzbank, " with further weakness to be seen in the coming months, taking gold towards the 1600/1500 region."
"Big picture, the 3.5 year bullish trend line is now seen at $1591," says Russell Browne at Scotia Mocatta.
"We expect sellers now on any move back to $1700."
"With sentiment now on very shaky ground, it's hard to identify where a floor might arise," says UBS strategist Edel Tully.
The gold price "needs physical demand to step in, and in size," she believes, "otherwise further downside seems inevitable."
Today in India – world No.1 for end-user demand – "Demand is pretty good as traders are finding these prices attractive," Reuters quoted one Mumbai gold dealer.
Tuesday afternoon saw gold fall below the average of its last 200 London PM Fixes for the first time since mid-December.
Seen earlier this week as "very strongly supporting" the gold price by some chart analysts, the 200-day moving average – now at $1672 – has exceeded the Dollar price on fewer than 11% of all trading days in the past 10 years.
"On [Tuesday's] move, the best part of $1.5 million ounces changed hands," notes Swiss dealer MKS Finance of the action in gold futures contracts.
Altogether, the open interest in US gold futures has shrunk by 6.2% over the last week, the same proportion as lost by the Dollar gold price.
Gold bullion holdings at the $71 billion SPDR Gold Trust were unchanged last night at 3-month highs near 1294 tonnes. Globally, gold ETF holdings ticked higher on Tuesday to a fresh record of 2406 tonnes according to Bloomberg.
"Gold has an out-sized mind share. It's a teeny tiny asset class," said strategist and author Barry Ritholtz to Daily Ticker on Tuesday.
"There are times to be bullish [on gold], there are times to be bearish and there are times to just watch," writes trading tipster Dennis Gartman in the latest edition of his eponymous letter.
"We shall probably join the Bugs again eventually on the aggressive long side of gold but not right now."
In Berlin today, Angela Merkel's coalition government moved to ratify the European Fiscal Pact agreed without the UK or Czech Republic last week in Brussels.
It will need opposition support to achieve the two-thirds majority required. Data from the Netherlands and a speech by the Spanish prime minister have already said those EU members will breach the government deficit limit (4.4% of GDP) set by the pact.
Last night the Greek government warned bondholders who don't agree to a 75% write-down of their investment that it "does not contemplate the availability of funds" to pay them anything.
Societe Generale SA, France's second-largest bank, today said it will participate in the restructuring, joining 6 of Greece's biggest banks as well as Italy's Unicredit.
Athens needs 95% of its creditors to agree to the debt swap, aimed at cutting its obligations by €100 billion.
