Gold finished trading in New York yesterday at $869.40, down $5.00 and silver was down 25 cents to $16.21. Gold remained largely unchanged in Asian trading but has fallen further in early European trading and is trading at $864.60/864.60 per ounce (0943 GMT).
The continuing rally in the dollar in recent days (has risen as high as EUR 1.5142 this morning) and the recent sharp fall in commodity and oil prices has seen gold come under further pressure and it looks set to test the next level of support at $845-$850.
However, given the financial and economic news has been as bad if not worse than that out of the Eurozone, the dollar rally is likely to be another dead cat bounce. Yesterday's US data was not encouraging with July sales and jobless numbers both disappointing. Further dollar weakness is more than likely in the coming months as the US government looks set to engage in a series of massive bailouts of banks, brokerages and possibly even car makers all of which face the possibility of insolvency.
As expected, gold has once again experienced weakness in the summer doldrums but a seasonal low is likely in the coming days and the length of the consolidation since March should see a very sharp rally in gold's favoured Autumn months (as was seen last year).
Gold and Silver
Gold is trading at $864/865 per ounce (0940 GMT).
Silver is trading at $15.81/15.85 per ounce (0940 GMT).
Platinum is trading at $1575/1580 per ounce (0940 GMT).
Palladium is trading at $353/358 per ounce (0940 GMT).