Gold gave back some ground this week as higher oil prices and rising bond yields shifted the focus back to inflation and stronger risk markets. In the report below, we break down what drove the pullback toward US$4,712, how investor positioning has cooled across ETFs and futures, and the key technical levels that will matter as gold and silver move into what looks like a consolidation phase.

“If you catch 100 red fire ants as well as 100 large black ants, and put them in a jar, at first, nothing will happen. However, if you violently shake the jar and dump them back on the ground the ants will fight until they eventually kill each other. The thing is, the red ants think the black ants are the enemy and vice versa, when in reality, the real enemy is the person who shook the jar.