Technically, the gold trend _may_ have backtested the daily SMA breakout, remains a long way to break the downtrend channel. The next magic number for uptrend continuation is 1327 IMO.
CFTC cot data on the comex paper market shows open interest is down 40% (and flat) from the Aug2011 high.
If trading interest is increasing in the paper market, then it is _not_ showing up in the latest comex paper numbers. This is despite all the manipulation rhetoric to the contrary.
Disaggregate positions shows interesting trend comparisons in net positions -
Participation is down, meaing gold price movement is LESS influenced by outright paper traders. Is you can see, speculation works _both_ ways.
It is axiomatic that deflation is bad for gold, and good for paper (fiat) currencies - since it preserves the purchasing power by definition. For 8 centuries gold has responded to war and inflation.
