Gold continues to trade sideways, although with a negative bias. Yet again, it is perilously close to significant support around $2,000 to $2,010, an area it last tested in mid-January. Once again, the US dollar is consolidating at higher levels. Last week we saw the Dollar Index break above resistance around 104.00. It was unable to hold its gains, and subsequently fell back below this level. But it has been heading up since the beginning of this year, and continues to make higher highs and higher lows. In contrast to gold, silver rallied earlier this morning and briefly topped $23 per ounce. But it sold off sharply as the futures market opened for business, dropping 50 cents in an hour. There has been some chatter recently saying that silver is undervalued and that demand looks likely to pick up this year given the metal’s many industrial and uses. Certainly, the gold:silver ratio is quite high around 87. But having many industrial uses can be a curse as well as a blessing, especially when one considers the current negative outlook for China’s economy.