1. Gold "remains vulnerable to risk reduction and short-covering rallies in the dollar, " says James Moore, analyst at thebulliondesk. com.

2. As the wave of short-covering subsided so did bond prices with 30-years briefly slipping into negative territory.

3. Short-covering and technical buying up through previous market highs seen fueling the rally - CPM Group analyst Catherine Virga.

4. Waves of selling are interrupted by strong short-covering rallies and pronounced lulls.

5. It appears that a short-covering rally may now be overtaken by real investor buying.

6. Hurley said the euro benefited from continued short-covering after bearish bets on the single currency hit record highs a few weeks ago.

7. "This sparked a substantial selloff at the open before the better-than-expected inflation report assuaged the market and sparked a round of short-covering," Canavan said.

8. "It looks very much as though it was a lot of short-covering, a lot of bears found themselves on the wrong side of the trade," he said of the October rally.

9. The improvement over the latest week and current magnitude of short positioning, highlights the potential and scope for further short-covering.

10. "Coming into the day, expectations were it could be a miserable day. It didn't happen, so I have to think there was huge short-covering behind this rally," Marcouiller said.

11. Skeptical bears have dismissed the nearly 3-month old rally as just a lot of short-covering and piling into beaten down trash, like financials.

12. Earlier the currency hit a three-week low at $1.3464. Traders cited short-covering as helping the euro after London trading wrapped up for the day.

13. With that said, a better than expected CPI reading would trigger another short-covering rally, which has the potential to fuel a run above key resistant at the area of the 20-day moving average.

14. Ideas yesterday's sharp losses in the soybean pit were overdone resulted in short-covering in overnight trade.

15. Jens Nordvig, head of G10 foreign-exchange strategy at Nomura in New York, said "the risk of a sizable U.S. dollar short-covering rally" is building as dollar shorts have grown very quickly recently.

16. ECB President Jean-Claude Trichet said price stability was not under threat, remarks that drove expectations the ECB could raise interest rates, helping to spark the short-covering.

17. US housing data was not as nasty as feared, also helping prompt a mild short-covering bid.