Gold Bears Still Growling, Prices Near 1-Year Low

New York (Aug 2)  Gold prices are moderately lower in early-afternoon dealings, and trading near the recent one-year low, basis nearby futures (and a 1.5-year low basis the December futures contract). A stronger U.S. dollar index that is near a 12-month high continues to scare buyers away from the precious metals markets. December gold futures were last down $5.20 an ounce at $1,222.40. September Comex silver was last down $0.047 at $15.405 an ounce.

There remains a lack of bullish fundamental news to support new buying interest in safe-haven gold and silver markets. Combine that with the bearish technical postures of both metals and dull summertime trading, and you get a gradual drift lower in prices.

The World Gold Council has reported that gold demand in India will be better in the second half of this year, due to good crop harvests and the festival seasons. India and China run neck-and-neck as the leading gold consumer in the world.

Traders are looking ahead to Friday’s U.S. jobs report for July. Wednesday’s ADP national employment report for July showed a rise of 219,000. That number was higher than the expected rise of 185,000. The non-farm payrolls number on Friday is forecast to come in at up 190,000. The stronger ADP number suggests Friday’s figure could come in higher, too.

The other key “outside market” today finds Nymex crude oil prices solidly higher and trading above $69.00 a barrel. If not for the rally in the oil market today, metals prices could be trading even lower.

Technically, the gold bears have the solid overall near-term technical advantage. There are no early chart clues to suggest a market bottom is close at hand.  A 3.5-month-old downtrend is in place on the daily bar chart. Gold bulls' next upside near-term price breakout objective is to produce a close above solid technical resistance at $1,250.00.

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