The selling pressure on gold continues today. Moreover, the relatively weaker demand on physical gold from Asia added salt to the wound.
Comex gold futures for August delivery was down by $11.60 to be traded at $1,374.50 while gold price in the spot market lost $13.60 to be traded at $1,373.90 per ounce.
The Bank of Japan kept their view on the current monetary policy unchanged. Some investors were disappointed as they hoped for more easing. The BOJ stated that the Japanese economy started to pick-up. As a result, the Japanese Yen gained around 1.98%, which added more pressure on gold.
The Standard & Poors credit rating raised the US credit rating from negative to stable. Investors took it as a sign of the US economy recovering from the late recession and an indicator of tapping the QE program sooner.
Reports from Asia and especially from India, the world’s number one gold consumer, say that the demand on physical gold is declining. The demand on foreign currencies used in India for gold purchases was down in the last 7-days from $225 million to $41 million, according to the Indian Economic Affairs Secretary.
The political and economic state in Europe is unstable. Bonds yields are rising in Spain, Italy, Greece and even Germany. The Turkish affairs are starting to take effect on Turkey’s economy. Germany is debating about taking part in the European Union financial bailout. The whole picture looks darker that it was.
The London AM gold price fix was down at $1,369.50 on Tuesday, compared to the previous PM fix at $1,383.25 per ounce.
On the technical side, the gold bears are gaining momentum, supported by the news from different markets around the world. The bears next technical objective is to close the prices below May’s low at $1,338. The gold bulls next near term objective became harder, as they needs to close the price above $1,423.30. The current resistance is at $1,387.70 while technical support is at $1,365.80 then at $1,355.