Morning Gold Market Report With more losses overnight on the charts, gold has slipped to the lowest level since early February. The bull camp has to be discouraged with this weeks action, as the market failed to garner buying interest off reports of fresh violence in the Ukraine. Gold has also been pressured by weakness in South African mining shares and by suggestions from the South African government that they will work until the platinum strike is ended. While gold derivative instruments saw an inflow of 7,654 ounces, investment interest in gold derivatives hasnt picked up despite 4 day declines of roughly $50 an ounce. Chinese gold prices were weaker overnight but that action should have been partially offset by initial signs of weakness in the US Dollar today. In looking forward to the action today, it is possible that the gold trade might find some support from the charts, as prices have finally touched a potentially critical consolidation zone around $1,250 in the June contract. Unfortunately for the bull camp, the market hasnt shown a distinctly positive correlation with positive US scheduled data of late and it also hasnt shown strength in the face of gains in global equities and that suggests the trade is currently uninterested in conditions that might eventually help to improve physical gold demand. Therefore, there might not be much of reaction to US claims later this morning, even though trade expectations call for a decline in claims. Other potential market impacting reports today are a US GDP 1st quarter revision, Pending Home sales and corporate profits. Comex Gold Stocks were 8.231 million ounces up 33,608 ounces. With 3 straight days of significant declines and a net 4 day high to low slide of roughly $50 an ounce, June Gold could now see its downside momentum slow. In fact, a logical support point on the charts is seen at $1,250 but perhaps the trade will temporarily press prices down to the late January consolidation lows down at $1,241. Pushed into the market, we still favor the downside but without a fresh fundamental headline issue to facilitate the selling, it is possible the current slide is close to running its course. In order to begin to flesh out a solid low today, probably requires a positive price reaction in gold from an improvement in US data!
Posted on: Thu, 29 May 2014 12:54:45 +0000