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.