Gold has lost nearly $30 per ounce over the last three sessions, while silver remains almost $1 per ounce lower in the same time frame.
Bullion.Directory precious metals analysis 24 July, 2014
By Christopher Lemieux
Senior FX and Commodities Analyst at FX Analytics
Gold continued the decent after the HSBC preliminary China purchasing manager’s index came in higher than expected, rising to 52 and beating analyst expectations of 51.2.
Gold broke through pivotal support at $1,300 per toz.
This marks the second PMI reading above 50 after four consecutive months of PMI contraction in China. Positive PMI data out of Germany continued to weaken precious metal futures, and the US initial jobless claims figure of 284,000 hit levels not seen since 2006.
However, the International Monetary Fund (IMF) cut global growth forecasts today, largely citing the 2.9 percent US gross domestic product contraction seen in the first quarter.
The IMF statement said, “Robust demand momentum has not yet emerged despite continued very low interest rates and easing of brakes to the recovery, including from fiscal consolidation or tight financial conditions“.
The IMF suggested that central banks should continue their ultra-low interest rate policies, which is a positive factor and should support gold.
Gold will remain under pressure if price lingers below $1,300 per toz. Deeper support remains at $1,274 and $1,265, while traders will likely retest $1,300. Silver will see minor support near $20.15 and $19.89 per ounce. $20.97/$21 is seen as key resistance.
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