Gold

Gold finished trading in New York yesterday at $957.00, down $4.00. Gold traded sideways and rose in Asia before rising in early European trading and then falling again and is now down 0.15% for the day.

Equity markets have bounced on what is likely to be another short term correction on massive short covering. Poor earnings from Google, Microsoft, Merrill and now Citigroup this morning should result in gold remaining well bid and support is at $950.

George Soros Goes Long Gold

Considering the extent of the oil price decline, gold has remained very resilient as we predicted. Big money interests realise that the long term gold/oil ratio favours higher gold prices and/or lower oil prices. Forbes reported that George Soros has gone long gold and short oil. (http://www.forbes.com/opinions/2008/07/16/soros-gold-merrill-oped-cx_rl_0717croesus.html). The articles states the ratio is 10 to 1 when in fact it is 15 to 1 which would see a gold price at 15 times the price of oil.

Were oil to fall further that could see oil at some $120 a barrel and gold at some $1,800 per ounce which seems extremely likely given the level of macroeconomic and systemic risk - unprecedented in modern financial and economic history.

Today's Data and Influences

The economic calendar contains little of importance today apart from Eurozone trade balance figures. Stocks and oil are likely to remain the key drivers in the currency and gold markets. Citigroup earnings in particular will be keenly anticipated and have the potential to be an important market driver as they are expected to report serious losses.

Gold and Silver

Gold is trading at $955.20/956.20 per ounce (1230 GMT).
Silver is trading at $18.35/18.40 per ounce (1230 GMT).

PGMs

Platinum is trading at $1947/1957 per ounce (1230 GMT).
Palladium is trading at $420/425 per ounce (1230 GMT).