Gold Holds Below $1,300 as Dollar Strength Assessed With Ukraine

                   Gold held below $1,300 an ounce as U.S. data that beat estimates strengthened the dollar, curbing demand for an alternative investment and countering haven bids from worsening tension between Ukraine and Russia.

Gold for immediate delivery traded at $1,290.22 an ounce at 11:05 a.m. in Singapore from $1,288.78 yesterday, when the metal rose and fell at least 0.4 percent before ending little changed, according to Bloomberg generic pricing. The dollar held near a nine-month high against the euro today.

Bullion ended a 12-year rally in 2013 on speculation the Federal Reserve would end monthly bond-buying used to fuel growth. Reports yesterday showed factory and service gains in the world’s largest economy, signaling that the recovery may be strengthening. Gold rebounded 7.2 percent this year, partly as unrest in Ukraine and the Middle East boosted haven demand.

Gold “is caught between an improving U.S. economy and tension in Ukraine,” said Huang Wei, a Shanghai-based analyst at Huatai Great Wall Futures Co. “We remain cautious as the Fed maintains its path to end asset purchases.”

Fed Bank of Dallas President Richard Fisher said yesterday that fellow policy makers are becoming more hawkish. In June, Fed officials forecast they would raise the federal funds rate above zero sometime next year, without specifying a month.

Poland said yesterday a renewed buildup of Russian troops on Ukraine’s border raises the specter of a possible invasion of its neighbor, as President Vladimir Putin ordered his government to prepare a response to U.S. and European sanctions.

Gold for December delivery advanced 0.5 percent to $1,291.50 an ounce on the Comex in New York. Holdings in the SPDR Gold Trust, the largest bullion-backed exchange-traded product, were unchanged at 800.05 metric tons yesterday.

Silver for immediate delivery rose as much as 0.4 percent to $19.8634 an ounce and traded at $19.8612. Earlier, the metal dropped to $19.74, the lowest level since June 18.

Spot platinum traded at $1,458.50 an ounce from $1,457.44 yesterday, when prices dropped for a second day. Palladium increased 0.3 percent to $848.23 an ounce, halting a four-day losing streak. - Bloomberg

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Gold Holds Below $1,300 as Easing Debt, Gaza Concerns Cut Demand

                  Gold held below $1,300 an ounce as Portugal’s bailout of Banco Espirito Santo SA reduced concern the lender’s crisis may spread and tension in Gaza eased, damping demand for a haven. Silver rose from a six-week low.

Gold for immediate delivery was at $1,288.99 an ounce at 12:16 p.m. in Singapore from $1,288.25 yesterday, according to Bloomberg generic pricing. The metal fell 0.4 percent yesterday as Portugal’s central bank took control of Banco Espirito Santo, helping the Standard & Poor’s 500 Index rebound from the biggest weekly loss in two years. Bullion fell for a third week in the period to Aug. 1, the longest such slump since September.

Data from the Institute for Supply Management may show today that U.S. services expanded to 56.5 in July from 56 in June, supporting the case for the Federal Reserve to raise borrowing costs. Gold tumbled 28 percent last year on expectations for reduced stimulus in the world’s largest economy. Prices rallied 7.3 percent this year partly on tensions in Ukraine and in the Middle East, where Israel and the Palestinians yesterday agreed to a 72-hour truce in Gaza.

“Interest in gold is fading as U.S. economic data continue to show signs of improvement,” Xia Yingying, an analyst at Nanhua Futures Co., said from Hangzhou, China. “Gold is also losing support from geopolitical tensions.”

Gold for December delivery traded at $1,289.70 an ounce on the Comex in New York from $1,288.90 yesterday. Assets in the SPDR Gold Trust, the largest bullion-backed exchange traded-product, fell 0.2 percent to 800.05 metric tons yesterday after being unchanged for six days.

Silver for immediate delivery rose 0.1 percent to $20.1893 an ounce. Prices earlier dropped to $20.1402, the lowest since June 19, sending the metal’s ratio to gold to 64.4204, the highest since June 18.

Spot platinum increased 0.2 percent to $1,464.75 an ounce, while palladium added 0.2 percent to $857.40 an ounce. - Bloomberg

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Gold Seen Reaching $1,400 by USAGOLD as U.S. Inflation Quickens

                   Gold will extend this year’s surprise rally and climb to the highest price since September on the outlook for accelerating inflation, USAGOLD Centennial Precious Metals Inc. said.

The metal will reach $1,400 an ounce by the end of the year, also supported by higher demand from Asia, Peter Grant, chief market analyst at USAGOLD in Denver said in a telephone interview yesterday. Bullion will climb even if the Federal Reserve increases interest rates, because gains in borrowing costs will probably be accompanied by rising consumer prices, he said.

Gold futures surged 57 percent in the two years through June 30, 2006, as the Federal Reserve raised its benchmark rate to 5.25 percent from 1.25 percent. Interest rates rose as the central bank struggled to contain inflation that accelerated to 4.3 percent, from 3.3 percent. Bullion fell 3 percent in July as the prospect of rising borrowing costs curbed the appeal of the metal as an alternative asset.

“If you look back over time, there are plenty of instances where rates have risen and gold has risen as well,” said Grant, who has tracked the precious metal for 28 years. “Inflation was going up and the Fed was chasing inflation by raising interest rates during that period,” he said, referring to 2004 to 2006.

The metal rallied 7.2 percent this year to $1,288.90 on the Comex in New York partly as violence in Ukraine and the Gaza Strip boosted demand for haven assets. Gold tumbled 28 percent in 2013, the biggest slump in three decades, as signs of accelerating U.S. economic growth raised concern that the Fed’s stimulus would end.

India Imports

The central bank reduced its monthly bond-buying program to $25 billion on July 30, making a sixth consecutive $10 billion cut.

Gold imports by India, the world’s second-largest user, jumped 65 percent in June after the central bank allowed more banks and traders to buy bullion overseas, widening the nation’s trade deficit to an 11-month high.

“I’m primarily looking at the actual physical demand driving prices higher,” Grant said. “I also think inflation is going to pick up a little bit as I anticipate that energy prices are going to rise by year-end as well.”

USAGOLD is a precious-metals dealer. - bloomberg

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Gold Above One-Month Low as U.S. Economy Assessed With Rates

                   Gold traded above a one-month low after three weeks of losses as investors weighed the health of the U.S. economy against the outlook for higher borrowing costs. Silver climbed from the lowest level in six weeks.

Gold for immediate delivery was at $1,292.90 an ounce at 11:31 a.m. in Singapore from $1,293.75 on Aug. 1, according to Bloomberg generic pricing. That day the metal fell to $1,279.30 an ounce, the lowest since June 19, before rebounding to pare the third week of losses that was the longest since September.

U.S. data Aug. 1 showed that while employers added more than 200,000 jobs for a sixth month, the jobless rate rose, damping bets the Federal Reserve will raise interest rates soon after ending monthly bond purchases later this year. That buoyed bullion as the Bloomberg Dollar Spot Index snapped a six-day win streak. Gold also rose on Aug. 1 as global equities fell after Banco Espirito Santo SA, which was taken over by Portugal’s central bank yesterday, was ordered to raise capital and Argentina defaulted.

“Gold had a reprieve as the dollar pulled back after the payrolls data,” said Zhang Lin, an analyst at Yongan Futures Co. in Hangzhou, China. “The U.S. has entered a monetary-tightening cycle and gold will continue to face downward pressure in the mid to longer term.”

Gold for December delivery traded at $1,293.80 an ounce on the Comex in New York from $1,294.80 on Aug. 1, when futures climbed 0.9 percent to trim a third weekly drop. Money managers cut their net-long position 10 percent in the week through July 29, the most since June, U.S. government data show.

Silver for immediate delivery added 0.2 percent to $20.3665 an ounce, after earlier falling to $20.255 an ounce, the lowest price since June 19. The metal retreated 3 percent in July for the biggest monthly loss since March.

Spot platinum lost 0.1 percent to $1,462.88 an ounce after declining in July. Palladium decreased 0.1 percent to $863.85 an ounce after prices capped a sixth month of gains in July for the longest such run since January 2011. - Bloomberg

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Gold / Silver / Copper futures - weekly outlook: August 4 - 8

                                     Gold futures bounced off a six-week low to end Friday’s session almost 1% higher, following the release of weaker than expected U.S. nonfarm payrolls data for July.

On the Comex division of the New York Mercantile Exchange, goldfor December delivery jumped 0.94%, or $12.00, on Friday to end the week at $1,294.80 a troy ounce.

Prices fell to a session low of $1,281.00 an ounce earlier Friday, the weakest level since June 19.

Gold prices were likely to find support at $1,276.20, the low from June 19 and resistance at $1,314.60, the high from July 29.

Gold regained strength after the U.S. Department of Labor said non-farm payrolls rose by a seasonally adjusted 209,000 in July, below expectations for an increase of 233,000.

The unemployment rate ticked up to 6.2% last month from 6.1% in June. Analysts had expected the jobless rate to hold steady at 6.1% in July.

The disappointing jobs report dampened optimism over the strength of the labor market and reduced expectations that the Federal Reserve will begin to raise rates sooner than previously thought.

Despite Friday’s strong gains, Comex gold prices declined 0.65%, or $8.50, on the week, the third consecutive weekly loss, as strong U.S. economic data underlined the view that the recovery is gaining momentum.

Official data on Wednesday showed that U.S. economy grew at an annual rate of 4.0% in the three months to June, outstripping forecasts of 3.0% and following a contraction of 2.1% in the first three months of the year.

Meanwhile, the Fed cut its asset purchase program by $10 billion to $25 billion per month at the conclusion of its two-day meeting on Wednesday, staying on course to end the bond-buying program in October.

Gold has been under heavy selling pressure in recent weeks as an improving U.S. economy fuelled speculation that the Fed will hike interest rates sooner than expected, which would reduce the need for gold for use as a hedge against loose monetary policy.

Data from the Commodities Futures Trading Commission released Friday showed that hedge funds and money managers decreased their bullish bets in gold futures in the week ending July 29.

Net longs totaled 122,092 contracts, down 10.3% from net longs of 136,120 in the preceding week.

Also on the Comex, silver for September delivery shed 0.2%, or 4.1 cents, on Friday to settle the week at $20.37 a troy ounce. Prices slumped to a daily low of $20.24 earlier in the session, the cheapest since June 19.

On the week, the September silver futures contract lost 1.26%, or 26.0 cents, the third straight weekly decline.

Data from the CFTC showed that net silver longs totaled 41,699 contracts as of last week, compared to net longs of 46,221 contracts in the preceding week.

Elsewhere in metals trading, copper for September delivery declined 0.51%, or 1.6 cents, on Friday to end the week at $3.214 a pound by close of trade.

On the week, Comex copper prices fell 0.8%, or 2.9 cents a pound, as investors gauged the health of China’s manufacturing sector.

Official data released Friday showed that China's manufacturing purchasing managers’ index rose to a two-year high of 51.7 in July from 51.0 in June, beating market expectations for a 51.4 reading.

Still, China's HSBC final manufacturing PMI for July ticked down to 51.7 from a preliminary reading of 52.0. Analysts had expected the index to remain unchanged.

China is the world's biggest buyer of copper, accounting for roughly 40% of the market.

According to the CFTC, net copper longs totaled 38,859 contracts as of last week, down from net longs of 44,107 contracts in the preceding week.

In the week ahead, investors will be focusing on the outcomes of a spate of central bank meetings, with the European Central Bank, the Bank of Japan, the Bank of England and the Reserve Bank of Australia all to hold monetary policy assessments. - investing.com

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Gold Heads for Longest Stretch of Weekly Losses Since September

                Gold headed for a third weekly loss in the longest run of declines since September as U.S. employment data may add to signs that the world’s largest economy is gaining traction.

Gold for immediate delivery fell as much as 0.3 percent to $1,279.30 an ounce, the lowest level since June 19, and was at $1,283.69 at 11:29 a.m. in Singapore, according to Bloomberg generic pricing. The metal declined 3.4 percent in July to post the biggest monthly loss this year as the Bloomberg Dollar Spot Index completed the largest advance since May 2013.

Gold slumped 28 percent last year on speculation that the Federal Reserve would reduce monthly bond purchases, which were cut this week for a sixth time. Data today may show U.S. employers added more than 200,000 jobs for a sixth month after a report yesterday showed claims ofunemployment benefits in the past month sank to an eight-year low. Bullion failed to rally this week even as weaker corporate results sent global equities tumbling amid Argentina’s debt default.

“Gold prices continued to pull back as stronger-than-expected reports on the U.S. economy damped demand for safety plays,” said Sarah Xie, a Hong Kong-based analyst at Wing Fung Financial Group Ltd. “Investors are reluctant to take big positions ahead of the U.S. jobs data.”

Gold for December delivery climbed 0.1 percent to $1,284.60 an ounce on the Comex in New York. Assets in the SPDR Gold Trust, the largest bullion-backed exchange traded-product, were unchanged for a fifth day yesterday at 801.8 metric tons.

U.S. Payrolls

The Bloomberg Dollar Spot Index held gains after rising yesterday to the highest level since March 20. While the average monthly advance in U.S. payrolls so far in 2014 has been about 231,000, Fed policy makers said in their statement this week that the labor market still has plenty of room for improvement.

Palladium for immediate delivery traded at $873.82 an ounce from $872.88 yesterday, when prices capped a sixth month of gains in the longest such run since January 2011. The metal climbed to $889.75 on July 17, the highest since February 2001, on concern that Russian supplies may be curbed on sanctions.

Palladium, used mainly in catalytic converters, rose 22 percent this year as output was disrupted by a five-month mine strike that ended in June in South Africa, the largest producer after Russia, while demand from the auto industry increased.

Spot silver was at $20.395 an ounce from $20.3962 yesterday, when the metal completed a monthly decline. Platinum added 0.4 percent to $1,465.81 an ounce after dropping in July for the first month in four. - Bloomberg

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Gold Heads for Longest Drop in 2 Months as U.S. Economy Improves

                   Gold retreated for a fourth day to head for a monthly decline as further signs that the U.S. recovery is gaining momentum strengthened the case for higher borrowing costs in the world’s largest economy.

Gold for immediate delivery fell as much as 0.2 percent to $1,294.24 an ounce, and was at $1,294.97 at 11:28 a.m. in Singapore, according to Bloomberg generic pricing. A fourth day of losses would be the longest streak since June. Bullion dropped 2.4 percent in July, while the Bloomberg Dollar Spot Index headed for the biggest monthly rise since May 2013, as data including gross domestic product beat estimates.

Gold sank 28 percent last year on expectations that the Federal Reserve would trim monthly bond buying, which it did for a sixth time yesterday. Policy makers also said in their July 30 statement that slack in the labor market persisted even as the economy was picking up, repeating that they will keep interest rates low for a considerable time after ending asset purchases. Data tomorrow may show U.S. employers added more than 200,000 jobs for a sixth month.

“Positive U.S. economic data is good for the dollar and bad for gold,” said Lv Jie, an analyst at Cinda Futures Co., a unit of one of four funds inChina created to buy bad debt from banks. “Geopolitical concerns still exist for support but the longer-term downtrend is unchanged as the U.S. moves toward tighter monetary policy.”

Bullion rebounded 7.8 percent this year as unrest in Ukraine and the Middle East boosted haven demand. Gaza’s main public market was hit by Israeli air strikes yesterday as the U.S. and European Union escalated sanctions against Russia.

ETP Inflow

Gold for December delivery traded at $1,296 an ounce on the Comex in New York from $1,296.90. U.S. exchange-traded products backed by precious metals took in $536.81 million this month, as of July 29, after a net outflow of $319 million in the six months to June, data compiled by Bloomberg show.

Palladium for immediate delivery traded at $880.76 an ounce from $880.35 yesterday, poised for a sixth month of gains in the longest such run since January 2011. The metal rallied to $889.75 on July 17, the highest price since February 2001, amid concern sanctions against Russia may curb supplies from the world’s largest producer.

Palladium, mainly used in catalytic converters, advanced 23 percent this year as output was disrupted by a five-month mine strike that ended in June in South Africa, the second-largest producer, while usage in cars increased.

Spot silver fell 0.2 percent to $20.5712 an ounce, heading for a 2.1 percent decline this month. Platinum was at $1,478.69 an ounce from $1,479.63 yesterday, set for the first monthly drop in four. - Bloomberg

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Gold Price Start The Week Higher But Analysts See Volatility On Horizon

                    Gold prices are starting the week on a positive note but analysts are expecting prices to remain volatile with significant economic events looming on the horizon.

Comex August gold opened the Sunday North American evening/Monday Asian session at $1,307.60 an ounce, up from Friday’s pit close of $1,303.30 an ounce. As of 8:45p.m. EDT, August gold was trading at $1,305.30 an ounce, relatively unchanged from Friday’s close.

Electronic trading of Comex September silver futures opened Sunday evening/Monday morning at $20.715 an ounce, slightly up from Friday’s pit close of $20.636 an ounce; as of 8:15 p.m. EDT, September silver was at $20.740 an ounce.

Although gold prices are back above $1,300 after hitting a four-week low earlier last week, analysts at HSBC said they are expecting to see choppy markets during the week, with the scheduled FOMC and U.S. jobs numbers out on Friday. 

“Gold price volatility is likely to pick-up next week with the Federal Open Market Committee meeting on 29-30 July and the July nonfarm payrolls data to be released on 1 August,” the analysts said in a report published late Friday.

Edward Meir, commodities consultant with INTL FCStone said in a research note published Sunday afternoon that gold could find some support early in the week as markets react to continued turmoil in the Middle East and Eastern Europe. He also said that a potential default by Argentina, which could come by Thursday, should keep investors on edge and boost gold demand.

However, he added strong economic data later in the week could help create some positive investor sentiment, which would be good for equity markets and bad for gold prices.

Analysts at ANZ Bank are expecting gold to struggle as geopolitical events have started to lose their impact on the gold market.

“We don't expect the latest Middle East tension to be a significant driver of prices over an extended period,” they said in their report published Sunday evening.

Physical demand, which has helped support gold prices in the last appears to be losing some momentum, Meir also noted in his report.

“In the physical markets, there was an outflow of 3.6 tons from the SPDR Gold Trust as of last Thursday,” he said. “China’s net overseas purchases of gold through Hong Kong fell to a 17-month low in June, sliding to 40.54 tons, from 52.60 tons in May and 104.6 tons in the year-ago period.” - kitco.com

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Gold / Silver / Copper futures - weekly outlook: July 28 - August 1

                          Gold futures rallied 1% on Friday, as investors continued to monitor geopolitical concerns in the Gaza strip and Ukraine.

On the Comex division of the New York Mercantile Exchange, goldfor August delivery jumped 0.97%, or $12.50, on Friday to end the week at $1,303.30 a troy ounce.

Gold prices were likely to find support at $1,287.50, the low from July 24 and resistance at $1,316.80, the high from July 22.

Gold’s safe haven appeal was boosted on Friday as investors continued to closely watch an intensifying geopolitical crisis between Moscow and the West over the situation in Ukraine.

The Pentagon said Friday that Russia has escalated the violence in Ukraine and may be set to provide more sophisticated weapons to pro-Russian rebels in eastern Ukraine.

Meanwhile, fighting between Israel and Hamas showed little sign of abating, despite ongoing efforts by the U.S. to reach a ceasefire.

Gold is often seen as a haven investment in times of geopolitical uncertainty.

Despite Friday’s strong gains, Comex gold prices declined 0.46%, or $6.10 an ounce, on the week, the second consecutive weekly loss.

Gold tumbled to a five-week low of $1,287.50 on Thursday after upbeat U.S. economic data added to speculation that the Federal Reserve will hike interest rates sooner than expected.

The U.S. Department of Labor reported that the number of individuals filing for initial jobless benefits in the week ending July 19 declined by 19,000 to hit an eight-year low of 284,000.

On Friday, the Census Bureau said that U.S. durable goods orders rose 0.7% in June, beating expectations for a 0.5% gain. Core durable goods orders, which are stripped of transportation items, grew 0.8% in June, beating expectations for a 0.6% gain.

The data primed market expectations for the Fed to wind down its bond-buying stimulus program around October and raise interest rates in 2015, which would reduce the need for gold for use as a hedge against loose monetary policy.

In the week ahead, investors will be looking ahead to Wednesday’s monetary policy announcement by the Federal Reserve. The U.S. will also release the monthly non-farm payrolls report for July later in the week as well as a preliminary estimate on second quarter economic growth.

Data from the Commodities Futures Trading Commission released Friday showed that hedge funds and money managers increased their bullish bets in gold futures in the week ending July 22.

Net longs totaled 136,120 contracts, up 3.1% from net longs of 131,971 in the preceding week.

Also on the Comex, silver for September delivery climbed 1.08%, or 22.1 cents, on Friday to settle the week at $20.63 a troy ounce, as investors returned to the market to seek cheap valuations after prices dropped to a five-week low on Thursday.

On the week, the September silver futures contract lost 1.19%, or 25.0 cents, the second straight weekly decline.

Data from the CFTC showed that net silver longs totaled 46,221 contracts as of last week, down slightly from net longs of 46,795 contracts in the preceding week.

Elsewhere in metals trading, copper for September delivery rallied to a daily high of $3.279 a pound on Friday, the most since July 13, before turning lower to end at $3.240 by close of trade, down 0.8%, or 2.6 cents.

On the week, Comex copper prices rose 1.72%, or 5.6 cents a pound as growing optimism over the health of the U.S. economy and speculation demand from top consumer China will increase in the near-term boosted prices.

According to the CFTC, net copper longs totaled 44,107 contracts as of last week, down from net longs of 48,994 contracts in the preceding week. -investing.com

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Copper Remains Near Recent Highs While Gold Continues To Bottom

                  Gold is trading at 1292.60 adding $1.80 but remaining weak as the US dollar maintains its strength. Silver added 83 points to reach 20.498 and platinum is flat at 1472.10. Gold futures fell to the lowest in five weeks in New York as the outlook for an improving global economy reduced demand for a haven. 

A preliminary China Purchasing Managers’ Index from HSBC Holdings Plc and Markit Economics rose to an 18-month high. U.S. jobless claims fell to the lowest since February 2006 last week, a government report today showed. The Standard & Poor’s 500 Index of stocks closed at a record yesterday. The decline extends losses this month for bullion after unrest in Ukraine and the Middle East helped prices rebound 10 percent in the first half of 2014. Goldman Sachs Group Inc. reiterated a call for gold to drop further by year-end with an accelerating U.S. recovery, even as the bank raised its long-term forecast on the metal.

Prices for the yellow metal fell 1 percent to below $1,300 an ounce as the dollar and stock markets rose on surprisingly low weekly jobless claims and robust corporate earnings out of the United States. 

Data from Europe showed the services sector in the 18-member euro zone performing better than any forecast from 39 economists in a Reuter’s poll. All that diverted investor attention from the clashes in Gaza between Hamas and Israel, as well as the tensions in the Crimean region after the sanctions on Russia and the downing of a Malaysian passenger jet, that sent bullion rallying last week.

Goldman repeated a forecast for gold to drop to $1,050 by the end of 2014, analysts wrote in a report dated yesterday. The bank said it raised its long-term forecast 13 percent to $1,200 in 2014-dollar terms “to make it more in line with our marginal-cost support level.”

Data from the China Gold Association yesterday showed consumption in the country, which surpassed India as the largest user last year, fell 19 percent in the first half of 2014.

Copper gave up a few points this morning as traders booked profits after Thursday’s rally on Chinese data. Copper is trading at 3.255. Copper dropped for the first time this week as investors viewed a rally to the highest price since July 14 as excessive amid rising global supplies.

Copper is down 2.8 percent this year, the most among the six main metals on the LME. Global supply will exceed demand by 353,000 tons in 2014 and by 492,000 tons in 2015, according to Goldman Sachs Group Inc. Goldman cut its 12-month estimate for copper to $6,200 a ton from $6,600 due to rising output and exposure to a weak property market in China, the biggest user. Copper futures rose the most in three weeks as a gauge of manufacturing climbed to an 18-month high in China, the world’s top consumer of industrial metals.

China’s factory measure from HSBC Holdings Plc and Markit Economics showed a preliminary July reading of 52, compared with the 51 median estimates of analysts surveyed. A level above 50 indicates expansion. Copper inventories monitored by the London Metal Exchange extended a slump to the lowest since August 2008. - Fxempire

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Gold Drops Below $1,300 as Stocks Rally Curbs Demand

         Gold fell to the lowest level in a week as a rally in equities damped demand for an alternative investment amid concern that physical consumption is faltering.

Gold for immediate delivery lost as much as 0.7 percent to $1,294.98 an ounce, the lowest since July 16, before trading at $1,295.92 by 2:32 p.m. in Singapore, according to Bloomberg generic pricing. The metal has retreated for three days, and is on course for the first back-to-back weekly drop since May.

Bullion sank 28 percent last year on expectations the Federal Reserve will reduce stimulus. The Standard & Poor’s 500 index rose to a record yesterday as earnings of companies including Facebook Inc. topped estimates. Data yesterday showed gold consumption in China, which surpassed India as the largest user last year, fell 19 percent in the first half of 2014. The metal isn’t likely to get support from Indian demand as import restrictions remain unchanged, according to Commerzbank AG.

“The rally in U.S. equities continues to be a headwind for gold, despite safe-haven buying providing some support to prices,” Victor Thianpiriya, commodity strategist at Australia & New Zealand Banking Group Ltd., wrote in a note today.

Goldman Sachs Group Inc. reiterated a call for gold to drop to $1,050 by the end of 2014 as the U.S. economic recovery accelerates, analysts wrote in a report dated yesterday. The bank raised its long-term forecast 13 percent to the marginal cost support level of $1,200 in 2014-dollar terms.

Ukraine Jets

Gold has rebounded 7.8 percent this year in part as tensions in Ukraine and the Middle East fueled haven demand. The price failed to advance yesterday even as pro-Russian separatists shot down two Ukrainian fighter jets in the same eastern region where a Malaysian Air passenger jet was destroyed on July 17, the government said.

Gold for December delivery fell as much as 0.7 percent to $1,297 an ounce in New York, the lowest since July 16, before trading at $1,298. Holdings in the SPDR Gold Trust, the largest bullion-backed exchange-traded product, rose for a second day yesterday, data on its website showed.

Silver for immediate delivery declined 0.6 percent to $20.7998 an ounce. Spot platinum dropped as much as 0.7 percent to $1,471.89 an ounce, the lowest level since June 27, before trading at $1,472.29. Palladium decreased 0.3 percent to $869.21 an ounce.

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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

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Gold Steady-Firmer; Selling Interest Limited by Geopolitics

                     Kitco Metals Roundup: Gold prices are steady to modestly higher in early U.S. trading Wednesday. Even though there is less risk aversion in the market place at mid-week, the geopolitical events recently are keeping sellers of gold pensive. August Comex gold was last up $2.40 at $1,308.80 an ounce. Spot gold was last quoted steady at $1,308.00. December Comex silver last traded up $0.039 at $21.105 an ounce.

The gold market has so far shown a muted reaction to reports just out that two Ukrainian military jets have been shot down by Russian rebels. Still, there is a bit more investor and trader risk appetite in the market place at mid-week. But the Russia-Ukraine crisis and the Israel-Hamas fighting remain on the front burner of the market place. Many veteran market watchers are surprised there has not been greater risk aversion in the market place amid the heightened geopolitical tensions the past week, or even the past few months. One explanation could be that the industrialized world is so awash in cash following the major central banks of the world pumping monies into the world financial system the past few years. In other words, there’s more money in the world to be thrown at many markets. That certainly appears to be the case in the major world stock indexes, which are hovering near record or multi-year highs. The above postulation also suggests serious price inflation should occur at some point down the road. However, at present there is more concern about deflation, especially in the European Union.

Gold, U.S. Treasuries and the U.S. dollar are safe-haven assets that have been and likely will continue to be supported from the heightened world tensions. I suspect that for the near term, trading action in many markets will day to day swing from risk-on to risk-off, depending on the news headlines of that day.

Traders and investors are looking forward to the next piece of economic data coming out of China—preliminary manufacturing data on Thursday.

U.S. economic data due for release Wednesday is light and includes the weekly mortgage applications survey and the weekly DOE liquid energy stocks report.

Wyckoff’s Daily Risk Rating: 7.0 (Russia-Ukraine crisis and Irael-Hamas conflict are still front-burner matters for markets.)

(Wyckoff’s Daily Risk Rating is your way to quickly gauge investor risk appetite in the world market place each day. Each day I assess the “risk-on” or “risk-off” trader mentality in the market place with a numerical reading of 1 to 10, with 1 being least risk-averse (most risk-on) and 10 being the most risk-averse (risk-off), and 5 being neutral.

The London A.M. gold fix is $1,307.50 versus the previous P.M. fixing of $1,310.25.

Technically, August gold futures bulls and bears are on a level near-term technical playing field amid recent choppy trading. The gold bulls’ next upside near-term price breakout objective is to produce a close above solid technical resistance at the July high of $1,346.80. Bears' next near-term downside breakout price objective is closing prices below solid technical support at last week’s low of $1,292.60. First resistance is seen at Tuesday’s high of $1,316.80 and then at this week’s high of $1,319.00. First support is seen at the overnight low of $1,305.40 and then at this week’s low of $1,302.20.  

December silver futures bulls have the slight near-term technical advantage amid choppy trading. Silver bulls’ next upside price breakout objective is closing prices above solid technical resistance at the July high of $21.67 an ounce. The next downside price breakout objective for the bears is closing prices below solid technical support at last week’s low of $20.70. First resistance is seen at this week’s high of $21.21 and then at $21.37. Next support is seen at this week’s low of $20.86 and then at $20.70. - kitco

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Gold And Crude Oil Show Unusual Reverse Divergence

               Gold is trading at 1307.90 this morning a bit stronger in the Asian market as traders bought up the cheaper commodity after its steady decline this week. Gold added $1.90 this morning while silver is down 21 points at 20.987 and platinum moved with gold to add $1.70 to trade at 1491.80.  Silver was steady in early Wednesday trade after dipping overnight, but looked likely to hold above $1,300 an ounce as geopolitical tensions from crises in Ukraine and the Gaza strip brought safe-haven bids. Tensions eased on Tuesday after a train carrying the remains of some of the victims arrived in Ukrainian government territory and separatist leaders gave Malaysian authorities the aircraft’s flight recorders.

SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, said its holdings rose 1.5 tonnes to 804.84 tonnes yesterday. Gold is expected to drift lower in the last half of 2014 leading to a second annual decline in the average price as US monetary policy returns to normal and Asian demand weakens. Gold prices are expected to trade in the red today as its safe haven appeal has shifted to the US dollar.

Base metals are trading on the down side this morning with Copper flat at 3.206. Broad fundamentals still suggest downside as we are seeing subdued demand from major consumer China. Yesterday updated Chinese exports of refined copper rose to the highest since March last year with a very small base. Exports rose as probe into warehousing at Qingdao Port undermines the appeal of holding inventories of the metal tied to financing.

In a surprise divergence, gold eased, the US dollar gained and crude oil continued to climb. Crude normally will follow the track of gold during geopolitical tensions and as a rule when the US dollar climbs oil falls as it becomes more expensive to buy in US dollars. This morning crude gave back 36 cents to trade at 102.03 but still remains well over its suggested and average trading range even as geopolitical turmoil moved back from the brink on Tuesday. Traders will be closely monitoring todays US inventory report. U.S. crude dropped to around $102 a barrel in early Asian trade this morning, falling for a second consecutive session with oil supplies unaffected by continuing violence in Iraq, Ukraine and Gaza. The American Petroleum Institute (API) data released on Tuesday showed that U.S. crude inventories fell 555,000 barrels last week to 374.7 million. In Libya, oil production had fallen to around 450,000 barrels per day (bpd) as of Monday compared with 555,000 bpd on Thursday. The drop comes as a twin suicide bombing at a Libyan army base in Benghazi killed at least four solders. The European Union threatened Russia on Tuesday with harsher sanctions over Ukraine that could inflict wider damage on its economy following the downing of a Malaysian airliner, but it delayed action for a few days. Brent oil is flat this morning at 107.22

- FXEMPIRE

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Gold prices gain in Asia as investors look for fresh cues on demand

              Gold prices gained slightly in Asia on Wednesday as investors looked for fresh demand cues following U.S. data overnight that pointed to steady prices.

On the Comex division of the New York Mercantile Exchange, goldfutures for August delivery traded at $1,307.70 a troy ounce, up 0.11%, after hitting an overnight session low of $1,302.60 and off a high of $1,315.80.

Overnight, the Labor Department reported that the U.S. consumer price index rose 2.1% in June, unchanged from the previous month and in line with forecasts, which strengthened the dollar and weakened gold, as the two assets tend to trade inversely with one another.

On a month-over-month basis, U.S. consumer prices were up 0.3% after a 0.4% increase in May, also in line with expectations.

The data kept expectations firm that the days of loose monetary policies that have supported gold since the Great Recession in the U.S. are coming to an end.

Market talk points to the Fed ending its bond-buying program around October and then raising interest rates some time in 2015, though the length of time that will pass between those two policy moves remains up in the air.

June's core inflation rate, which excludes food and energy costs, rose by just 0.1% from May and 1.9% on year, slightly below market calls for 0.2% and 2.0% readings, respectively, which illustrated how gasoline was driving the CPI up, though markets viewed the numbers as fundamentally healthy anyway.

Elsewhere, the National Association of Realtors reported earlier that existing U.S. home sales rose 2.6% to 5.04 million units in June from 4.91 million in May, beating market forecasts for a 2.0% rise to 4.97 million units.

Silver for September delivery was down 0.01% at $21.005 a troy ounce. Copper futures for September delivery fell 0.05% at $3.203 a pound.

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