Despite day-to-day volatility, at the core of the gold market is confusion. Experts are finding it hard to produce a reason for gold's recent price action. The metal has been moving with the stock market as investors feel better about buying assets. The metal has been moving inversely to the U.S. dollar and with the euro therefore intimately tied to headlines out of Europe. Both of these patterns seem to have evaporated today. "The obvious suspects are not holding up," says Philip Klapwiijk, Global Head of Metals Analytics at GFMS an independent research consultancy owned by Thomson Reuters. Recent price action "suggests some bailing out going on." Also not helping is the massive confusion headed into Sunday's European Commission meeting where the pressure mounts for leaders to provide clarity and a quick solution to save Greece, bondholders and banks. French President Sarkozy reportedly initated an emergency meeting with German Chancellor Merkel about the firepower of the bailout fund and how best to use its available 440 billion euros. The two leaders also disagree on the loss bondholders should take on Greek bonds -- Merkel wanting a steep haircut to save Germany the expense of having to pony up more cash and Sarkozy wanting more moderate losses to protect its nation's banks, which have heavy exposure. The murky outlook has become a negative for gold. Typically gold would shine in this environment as a safe haven, but it seems like investors prefer to sell the asset. "If you look at the volatility in the market of late ... $20 moves in a day are not that
Alix Steel in New York. >To contact the writer of this article, click here: Alix Steel.