Further consolidation was seen yesterday with gold and silver rising marginally again and both look set to have a second strong week of gains.

While the staggering pace of economic decline has certainly abated, individual economies and the global economy continues to deteriorate as recessions deepen internationally. All the talk of green shoots while understandable, is the type of unrealistic wishful thinking and superficial analysis that helped lull investors into a false sense of security and get our financial and economic systems into the dreadful mess they are in today.

In this environment, stocks and bonds are likely to struggle and safe haven demand for gold will remain robust.

This is especially the case as company profits are continuing to fall and dividends are being slashed and thus the opportunity cost of owning gold due to the lack of yield is becoming less of a negative for gold.

Both technically and fundamentally gold looks as sound as ever and the short, medium and long term fundamentals are very sound.