Gold prices traded listlessly during the Tuesday US trading period as the bearish downcycle might be running on fumes.
Gold for August delivery on the Comex division of the New York Mercantile Exchange fell 30 cents to close at $1,096.20 per ounce. Trade ranged from $1,090.70 to $1,098.20.
“Last week’s break of $1,155 has opened up a whole new range of prices below and it seems we are entering one of the final legs of this bear phase,” Triland Metals said in a report. “Yes, the market is very bearish – and it seems short too; but the rhetoric in the dealer community is that it is ripe for a short covering.”
From a fundamental perspective, physical gold demand was down 14 percent year-over-year in the second quarter and at the lowest level since 2008, according to the Thomson Reuters GFMS gold survey.
Additionally, China imported just 37.1 tonnes of gold on a net basis in June, according to the Census and Statistics Department of the Hong Kong Government, once again supporting the widely held assumption that demand in one of the world’s largest consumers is faltering.
Premiums have been stagnant around $2 on the Shanghai Gold Exchange for some time and have yet to really react to the recent collapse in international prices.
Today begins the initial two day Federal Open Market Committee (FOMC) Meeting. A rate hike is unlikely, but investors will suss out any information in regards to a possible September hike after an increasingly hawkish tone has emitted from the Federal Reserve.
Meanwhile in US equities, the Dow Jones industrial average and S&P were up 1.2 percent and 1.3 percent respectively, while the dollar was 0.3 stronger at $1.1056 against the euro.
In a miexed data today, S&P/CS composite-20 HPI rose 4.9 percent, below the 5.2 forecast. With CB consumer confidence in June also disappoint at 90.9, a stark difference from the 100.1 estimate.
Positive news exists with the Richmond manufacturing index in July was 13, with consensus at 6. Flash services PMI in July was 55.2, scrapping above the 55.1 prediction.
As for other precious metals, Comex silver for September delivery rose 4.5 cents to $14.650 per ounce. Trade has ranged from $14.510 to $14.675.
Platinum for October settlement fell $3.60 to $985.30, while the most actively traded palladium contract was at $619.60, up $6.50.
(Editing by Tom Jennemann)
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