Gold Is Tumbling While Copper Is Climbing

                        Gold is trading below $1300 and headed down this morning. Gold gave up $6.70 in the Asian session to trade at 1298.00 after touching a low of $1295.78. Silver followed alone declining by 152 points to trade at 20.843 and platinum touched 1479.65 duplicating gold’s movements. Asian equity markets rose on following upbeat economic data from China and as the region’s earnings season got under way. On Wednesday gold was holding its ground above $1,300 as violence deepened in the Middle East over the Gaza strip and as holdings in the top bullion-backed fund rose on safe-haven bids. Tensions remained high between Russia and the West over Ukraine.  Kiev said two of its fighter jets were shot down over the rebel-held territory in eastern Ukraine on Wednesday, and the missiles that brought them down might have been fired from Russia.

SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, said its holdings rose 0.6 tonnes to 805.44 tonnes on Wednesday – a second straight day of increase. Gaza fighting raged on Wednesday, displacing thousands more Palestinians in the battered territory as U.S. Secretary of State John Kerry said efforts to secure a truce between Israel and Hamas had made some progress. Gold prices are expected to move in a range to down for the day over its fading safe haven appeal and poor physical demand.

China’s HSBC Flash Manufacturing Purchasing Managers’ Index (PMI) increased by 1.3 points to 52-mark in July from 50.7-level in the last month.

The US Dollar Index traded on a positive note and gained around 0.1 percent yesterday on the back of weak market sentiments in later part of the trade which lead to increase in demand for the low yielding currency. However, sharp upside in the currency was capped due to estimates of rise in interest rates in near future and investors will keep a close eye on US Federal Reserve meeting to be on held 29th-30th July 2014. The currency touched an intraday high of 80.92 and closed at same levels on Wednesday. The US dollar is trading at 80.90 in the Asian session.

Base metals on traded lower yesterday on speculation that the rally in the prices of Zinc, Lead and Aluminium were excessive in absence of enough fundamental demand. Also, investors were conscious ahead of manufacturing data from the US, Euro Zone and China due today. However, declining trend in LME inventories along with recovery in markets sentiments restricted sharp downside. Metals reversed their declines to gain after the release of Chinese PMI data, with copper climbing to trade at 3.231 up by 25 points and continuing to rise.  - fxempire