Gold Price Remains In Neutral To Bearish Pattern

London (July 16)  Gold has found some minor interest overnight as the dollar softened moderately. The fundamental picture suggests that gold continues to have a downward bias and our target of $1,220 suggested two weeks ago, after gold’s break below $1,252, remains viable. There is buying interest in the $1,238 area, but the level has been tested twice and a third attempt may prove successful. Gold’s direction remains dependent on the course of the dollar and here the 10-year bond rate becomes a focal point. When the yield was north of 3%, gold came under selling pressure, but the current yield closer to 2.85% should have created a bigger bounce for the yellow metal. It is probable that the yield goes higher from here, which will again prompt dollar buying and create an issue for gold prices. On the bright side, the weaker prices have begun to spark investor interest again in the physical market, but the volumes remain much softer on a year-on-year comparison. Platinum has a significant increase in retail physical buying, in the low $800’3.

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