| Gold: If It Falls Another 10 Per Cent, The Bull Market In Gold Would Technically Be Over
Despite fresh new lows in the dollar overnight, the gold market forged some sloppy to slightly weaker price action in the early Friday morning US trade. The gold trade also saw evidence of higher production forecasts from an Australian gold miner overnight, but the gold trade doesn't seem to be that interested in physical supply side stories. Some traders attribute the weakness in gold prices from this week's highs to a consistent decline in Euro zone debt threats, while others point the blame towards the evidence of slowing from the US economy.
It is a good bet that a bigger than expected decline in the US PPI report in the prior trading session prompted some deflationary long liquidation in gold. On the other hand, the gold market does seem to be getting some residual bargain-hunting buying interest because of the decline in the flight-to-quality standing of the US dollar.
With another monthly inflation reading due out from the US this morning, the view for inflation might not be expected to do any favors for the bull camp today, especially since the Fed's Lacker in a speech overnight, revised his 2010 US growth forecasts downward. Some analysts continue to think that the direction of the US equity market is destined to be a driving force for gold prices again today. Comex Gold Stocks were 11.041 million ounces, up 64,027 ounces.
OUTSIDE MARKET DEVELOPMENTS: (6:00 AM CST) Equity markets in Asia were generally lower, but stock indices in Europe are mixed during overnight trading. US equity indices have moved slightly higher during the initial Friday morning trading action. The Dollar has moved lower against most of the major currencies going into the US opening.
The head of the IMF said that the results of the Euro zone bank stress tests would show all major European banks have sufficient capital. A containment cap that BP placed on a leaking well in the Gulf of Mexico has completely stopped the flow of oil for now. The Japanese Industry Activities index for May was down 0.9%, lower than forecast.
The Euro zone Foreign Trade deficit for May was 3.4 billion Euros, much weaker than expected. Today's US economic numbers include the June Consumer Price Index to be released at 7:30 AM, and a private survey of Consumer Sentiment released around 9:00 AM. Safe Harbor Statement: Some forward looking statements on projections, estimates, expectations & outlook are included to enable a better comprehension of the Company prospects. Actual results may, however, differ materially from those stated on account of factors such as changes in government regulations, tax regimes, economic developments within India and the countries within which the Company conducts its business, exchange rate and interest rate movements, impact of competing products and their pricing, product demand and supply constraints. Nothing in this article is, or should be construed as, investment advice. |
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