Gold is gradually drifting back to its previous trading range between $1,620 and $1,640, even in defiance of the U.S. dollar losing ground to the euro. 

Prices for gold were down $4.26 to $1,662.62 in early trading and silver was off $0.23 to $30.83, raising the silver/gold ratio to 53.9, the highest reading in months. 

There isn’t any news that should be driving buying or selling right at the moment and the markets are basically drifting sideways on soft demand.  Silver has been in a soft patch since the fall of last year, with prices declining since then and remaining flat.  In the context of silver do keep in mind that the phrase “remaining flat” can look like a wild zig-zag on a shorter time horizon. 

Given the continued divergence from gold prices, any uptick in industrial demand could push silver prices wildly higher on short notice.  By way of a disclaimer, my personal precious metal buys lately have been predominantly silver. 

There are signs that the market for gold is starting to pick up again in Asian markets.  Demand for physical gold in India was depressed by a recent vendor strike and weaker demand in China on concerns over its economic condition have kept a damper on prices and left metals traders in a glum mood. 

I still believe the current softness in the precious metals market is largely an anomaly.  There are not any macro trends to account for a sustained correction in prices. 

The precious metals market is not alone in being painted in shades of grey.  Equities have been on a slide the last few days, the news from Spain has weighed on the markets and even the housing market is in an extended funk. 

Use price dips as an entry point and the current market softness as an opportunity to accumulate.  Anytime prices dip below $1,620, I’ll shift my purchases toward gold.  But as long the silver/gold ratio stays high I’ll have a bias toward silver. 

As I’ve mentioned before, you never make any money waiting for the market to pick a direction.  Buy when the market is selling and sell when they’re buying and be decisive when the market lacks direction.