August gold continues to coil tightly in a formation that would seem to point to a breakout and a fresh trend signal ahead.
Surprisingly gold is tracking higher early today in the face of news that Venezuela has been able to orchestrate 24 tons of gold sales to the United Arab Emirates and Turkey since the beginning of April. It is also somewhat impressive that gold has been able to track in positive ground this morning in the face of a hook up trade in the dollar on its charts.
However the bull camp remains hopeful that today's US retail sales report will be anemic and that will rekindle rate cut orientated buying again. Estimates for this morning's US retail sales report call for a 0.1% gain compared to 0.5% last month.
However those looking for potential guidance on a US rate cut "dot plot" should realize industrial production and capacity utilization figures will also be seen later today.
In a bearish signal from yesterday, gold prices did not seem to benefit at all from news that Indian gold imports in June rose 13.2% as that suggests the market is not currently focused on bullish classic demand issues.
Some traders think that favorable Chinese retail sales news earlier this week provided safe haven liquidation pressure to gold prices yesterday, but the scheduled data from China overall was somewhat offsetting with Chinese GDP readings some of the slowest growth in 27 years.
Going forward we are concerned with the net spec and fund long in gold as the market has been holding close to the largest net spec long positioning since September 2016. While a Canadian bank raised its gold price targeting to $1,500 next year yesterday, it should be noted that the rally off last week's low has been forged on declining trading volume and nearly flat open interest.
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Non-Reliance and Risk Disclosure: The opinions expressed here are for general information purposes only and should not be construed as trade recommendations, nor a solicitation of an offer to buy or sell any precious metals product. The material presented is based on information that we consider reliable, but we do not represent that it is accurate, complete and/or up to date, and it should not be relied on as such. Opinions expressed are current as of the time of posting and only represent the views of the author and not those of Zaner Financial Services LLC, unless otherwise expressly noted.
