A Gold Moment: July 25, 2014
Momentum in the gold market is a powerful force. Yesterday started with a bearish bias as traders recognized the failure of any more upside from the geopolitical pressures. Although the trouble in Ukraine seems to be escalating instead of subsiding and the growing power of ISIS remains evident, money managers don’t see these issues currently threatening the monetary system nor international trade, yet.
Then there is the US economy. Yesterday saw a good weekly jobless number, but it also brought a dramatically disappointing New Home Sales figure. This number was not only weaker than expected, but last month’s good news was replaced with a weak number. There is also the US rate hike conversation that is dying in importance for now. Whether a rate hike comes in late 2015 or early 2016 seems like semantics when they both mean the Fed is on track and in full control of the US economic system.
The demand picture seems to be getting a lot of attention as China’s import numbers from Hong Kong are down from the same period a year ago. Some analysts are pointing to these numbers as a measure of a slowing appetite for gold from the Chinese public. Of course, these weaker numbers are imports from Hong Kong, not total imports. The Chinese do not publish those figures and they began taking more deliveries into Shanghai over the past year. It is too early to tell what the real measures are there.
Technically, the short term time frames oversold signals kept prices from sliding too far and continue to search for a little more recovery. The longer time frames remain in the hands of bears making most rallies difficult to sustain. Resistance will likely be seen at 1303, 1307 and 1314, while support will again be 1292, 1286 and 1279.
ETF: GLD Deposits: 801.84 tonnes -3.60
Comex GC O.I. : 400,327 -5290
ETF: SLV Deposits: 10014.63 tonnes +25.37
Comex SI O.I.: 162,323 -162