According to Michael Lombardi, lead contributor to Profit Confidential, there is mounting evidence of large amounts of buying in the gold market by India, Japan and China.

In the article, Two Major Countries Join in China's Quest for Gold, Lombardi says that, culturally, Asia views gold bullion and the reasons for buying gold bullion differently than we do here in the West....

Gold buying has spread to other Asian countries [than India and China], like Japan. Lombardi points out that, ever since the Japanese government reported a budget deficit, the Japanese consumer increased its buying of gold bullion to be at a 15% greater pace than last year

"The Japanese consumer bought 15% more gold bullion in 2011 than 2010. Thus far in 2012, this trend has shown no signs of slowing down," says Lombardi....

Eoin Treacy's view Gold has been largely rangebound since testing the $1550 area between late September and December and has firmed in the region of the 200-day MA over the last month. However, while the metal's price has been comparatively steady, gold shares deteriorated sharply over the last month and many are now quite oversold on a short term basis.

Gold shares were the best performing sector in early 2009 following the credit crisis crash. However, they have subsequently failed to keep pace with the wider market and bullish commonality deteriorated from the middle of last year. The Gold Bugs Index of un-hedged shares broke downwards from a Type-3 top, as taught at The Chart Seminar, in March and has developed a short-term oversold condition. It bounced rather well last week but the short-term progression of lower rally highs remains intact. A sustained move above 465 will be required to confirm a return to demand dominance beyond the short term. GoldCorp and Barrick Gold share a relatively similar pattern to the Index.

Randgold Resources was among the best performing gold miners but it fell abruptly through the 200-day MA from mid-March. It appears to be in the process of unwinding a short-term oversold condition and a sustained move below $80 would be required to question potential for an additional bounce. A sustained move back above $100 will be needed to suggest a return to medium-term demand dominance.

Yamana Gold has one of the steadiest chart patterns in the sector at present. It pulled back to test the $14 region and the region of the 200-day MA this month and a sustained move below last week's low would be required to question potential for some additional upside. Companhia de Minas Buenaventura and Eldorado Gold have also been relatively steady and demonstrate some clear evidence of accumulation.

Newmont Mining, IAMGold, AngloGold Ashanti, Harmony Gold and Gold Fields have all experienced technical deterioration but are oversold in the short term. At least a relief rally is likely in the current environment but support will need to be found above the recent lows on the next pullback to confirm a return to demand dominance beyond the capacity for some short covering.

New Gold was the only one of these shares to post a new reaction low today. Kinross Gold and Hecla Mining remain in consistent downtrends defined by unbroken progressions of lower rally highs. These will need to be broken to begin to suggest demand is beginning to return to dominance. Agnico Eagle has posted perhaps the most impressive rally from an oversold level and broke the progression of lower rally highs in the process.