Trader Dan Norcini told King World News:
"...The bottom line is there was some very powerful buying that came into the gold market from some extremely strong hands. They were strong enough that they could absorb hedge fund algorithm related selling, which is significant right now across the commodity sector.
"What that tells us is the rumors that gold is dead as a safe haven asset are completely unfounded. No market trades the way gold did today if it were not widely considered to be a safe haven. Extremely strong hands are buying gold and they are buying it as a safe haven, and as a way to diversify currency positions. These are the kind of buyers that do not chase prices, Eric.
"The longer gold trades above the $1,550 mark, the better it is as far as the longer-term price formation is concerned for gold. What this does is create a very strong area on the chart, or a floor that buyers around the world can key in on and say to themselves, ‘This is where we want to buy gold.’
"To see gold accelerate higher, we really need to break back above $1,600. If that move above $1,600 were to take place, people would have to remember that it would be happening with a very low level of hedge fund exposure to gold. This would allow for much greater gains for gold as the momentum swings to the upside..."