GOLD MARKET UPDATE

"Gold is likely to remain on the defensive in the coming sessions," said James Moore, an analyst at TheBullionDesk.com, in a research note.
"While expectation of a U.S. rate hike have bolstered the dollar, the Fed is unlikely to make sharp rate increases for fear of damaging economic growth, and the question remains as to how many more financial institutions the Fed/Treasury is willing to bail out before it allows nature to run its course," Moore said.

Metals Cool, Looking for Support

The precious metals saw a cooling this week, due largely to the drop in oil prices and the strength that lended to the US Dollar and the Dow.Gold just broke below support at 959.48, and may be on its way to test 946.35. If the drop continues beyond that, then 929.13 is the next likely candidate for support. If we resume moving up, then 974.22 and 991.43 are the most likely resistance

GOLD REPORT

"With investor risk appetite showing a slight improvement and having posted aggressive gains last week, it comes as no surprise to see the metal correct," said James Moore, an analyst at TheBullionDesk.com.
He cast the current trading backdrop for gold in favorable terms.
"To avoid a deeper correction, gold needs to establish a base above the $953-$955 chart level, but given the backdrop of rising inflation and recessionary pressures and increased financial market jitters, we anticipate investors will view dips favorably, with the metal ultimately set to rechallenge $1,000," Moore said in a note.

BULLION MARKET UPDATE

The precious metals complex has been trading sideways since the beginning of the second quarter of this year. Gold has been in the $870-960 range. We believe this reflects the directionless performance in the US dollar as the two has been quite well correlated recently. Nevertheless we keep our bullish stance and we expect this range to be broken, and as it looks now, the probable outcome is to the upside. In general when the price has been in “balance” for a few months the break out is violent and the 1000usd target reached quickly. We need a daily close above $964 for August Gold (GCQ8) to trigger this move up. Equity market weakness and a potential escalation in geopolitical risk in the Middle East will be supportive to the metal.

Bullion Report

Gold has now on consecutive days tested the 100 day moving average at $915. Support remains at $915 and $900 should continue to provide strong support especially in the light of the increasing tensions with Iran. Although prices may need to consolidate at these levels prior to breaking through resistance at $945-$950 and rechallenging the psychological level of $1,000 per ounce.

Gold futures decline on higher dollar, weaker oil - Is this buying oppurtunity?

"I think we're seeing massive commodity liquidation today off the heels of a strong dollar and some general profit taking after yet another big commodity month in June," said Zachary Oxman, a senior trader at Wisdom Financial.
"Gold's recent ascent was quite rapid, and correction and consolidation can be expected," wrote Mark O'Byrne, director at Gold & Silver Investments Ltd., in a research report.
Gold prices should find support at the $915 and $900 levels, he said.
"Inflation will remain the topic du jour as the Bank of England follows the Fed and [European Central Bank] in trying to tread the dangerous tightrope of sharply declining growth and rising inflation or stagflation," O'Byrne said. James Steel, chief commodities analyst at HSBC expects gold prices to trade on a weak note this week. Buying Gold arround $900 for a target of $1000 in few weeks likely to be fruitful strategy.

GOLD WEEKLY UPDATE

A weaker US dollar and equity markets still on a sell mode provided a boost to gold prices this week, with August gold (gcq8) price rallying to $950, a one month high. We believe the US strength we witnessed on Thursday after Trichet comments was a knee-jerk reaction, we expect the US dollar to stay weak in the coming months and subsequently the 1.60 level against euro to go. We therefore maintain our bullish outlook for Gold and a retest of the $1000 level in the coming weeks.
More short term as Long as August Gold (gcq8/ygq8/zgq8) stays above $923 are we are looking for Gold to test the $953 area and subsequently $967 for next week as target.

ECB Increases Rates as Trichet Warns of 'Exploding' Inflation

Buying single currecy at falls likely to be fruitfull. The dollar looks set to fall through support at 1.60 in the coming days and 1.70 euro/dollar looks like a very real possibility by the end of September. Longer term, the likelihood of a sharp long recession in the U.S. could well see the euro reach 1.80 or even 2.00 against the dollar (as sterling did to the surprise of many in recent years).