Gold : Increasing Confidence of Bottom

• 2 central bankers remarks tonight suggesting (short term) tolerance for higher inflation.
• Bernanke : "Although economic growth will probably increase this year, we expect the unemployment rate to remain stubbornly above, and inflation to remain stubbornly below, the levels that Federal Reserve policymakers have judged to be consistent over the longer term with our mandate" = QE2 end+Fed rate hikes a long way off.
• Trichet : "Inflation is likely to climb further and could exceed the European Central Bank's target for most of the year but poses no threat yet to medium-term price stability" = No ECB rate hikes yet.
• Threat to Gold from higher policy rates diminished. Technicals suggest that the sell-off from 1431 to 1308 is probably over. Base building now for further assault higher. Can say buy dips with increasing confidence now. Central banks playing with fire.