China’s Inventories Weigh On Gold
Today’s Spotlight Market
Gold futures had a rocky start to the week, with heavy selling out of China. The knee jerk reaction to Chinese Gold inventory data caused the price of the metal to have an intraday crash on Sunday night, which pushed the August contract down to the 1080 level. Overall, trader sentiment has become increasingly bearish for Gold and other precious metals. There is simply not as much geopolitical and economic risk out there
Fundamentals
China reported its Gold reserves for the first time since April 2009.? At the end of June, the country?s holdings totaled 53.32 million troy ounces, which was a 57% increase from the last time the country reported its holdings. While this is a sizable increase over the 6 plus years since the last report, it was half of what the market was expecting.? The news comes at a bad time for the Gold market, as this is typically a slow time for Indian Gold buying.? Commentary from St. Louis Fed President James Bullard suggesting that there is a better than 50% chance of a rate hike in September.? There was an increasing opinion that the Fed may have to wait until the new year for rate hikes.
Technical Notes – View Today’s Chart
Turning to the chart, we see the August Gold contract blowing through support at the 1147.50 level.? In addition to the news items surrounding the Gold market, it appears as though technical selling helped fuel yesterday?s price spike.? Sell stops below the 1147.50 support level added fuel to the sell-off.? Thus far, prices have been reluctant to stay below the 1100.00 level.
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