While ScotiaMocatta remains bullish overall on gold, analysts advised they would not be surprised to see a pullback first as some profit taking seems likely. Expect dips to be well supported.

Given the extent of the ETF buying and the Fed's embracement of quantitative easing, we are surprised prices did not rechallenge the February peak again. The fact they have not done so, raises a warning flag that perhaps the rally has run its course, at least for a while, ScotiaMocatta said.

As such, we feel there is a danger of some stale long liquidation that could push prices down to test for support between $860/oz and $850/oz. Such moves may well be short-lived if the market is to avoid even larger falls.

While silver has mirrored the performance in gold, ScotiaMocatta finds that silver is finding more support than gold as industrial metals are in demand.

Although investors continue to buy into silver ETFs, the rate of investment has slowed as the net fund long position has also declined. Both these need close monitoring.

ScotiaMocatta's analysis found that overall, the silver market is in a structural surplus. Thus far that surplus has been absorbed by investment buying, but if investment interest does not fill the gap left by weak industrial demand it will be hard for prices to hold these levels, let alone rally.

Silver prices are still correcting and have yet to confirm they have found a base, ScotiaMocatta noted. The medium outlook remains bullish and as such we are waiting for the next good buying opportunity, but are in no hurry.

ScotiaMocatta's analysis finds PGMs continue to put in strong rallies and look more robust than gold. Although the auto market is depressed around the world, the robust nature of the PGM rallies is surprising. ...If China is buying industrial metals then it would not be surprising if they were buying PGMs too.

Although the rallies currently look robust and have not faltered as has the rally in gold, which suggests relative strength, we would not be inclined to chase prices from these levels, the analysts advised. We would, however, wait for prices to pull back first. Indeed with poor economic and industrial outlook, if the prices continue to rise then they may well offer some shorting opportunities.

Nevertheless, ScotiaMocatta cautioned, Like the rest of the markets we fear that we are seeing a bear market rally in the PGMs, which is being driven by restocking, strong investor buying and a pickup in apparent consumption as the trade switch from destocking to hand to mouth buying. However, once the restocking has run its course, there is a danger that industrial demand slows again, putting the onus back on investors.