The gold market has exhibited significant volatility over the past 36 hours of trade and the bull camp has come away with a victory. In fact economic uncertainty has been thrust back into the forefront with the US 10% tariff addition and that has knocked the dollar back sharply from its peak yesterday.

Throughout the late May and June slide in the dollar it appeared as if the markets were holding the dollar to task for "too many" trade battle fronts with the thinking that multiple battles would ultimately cripple the US economy. Therefore the dollar bull camp has seen expectations for positive forward growth moderated again and the presence of much weaker than expected US data yesterday adds to the liquidation pressure in the dollar today.

However the US macroeconomic outlook will receive key information this morning in the form of the nonfarm payroll reading which is expected to yield a gain of 164,000 jobs but without a moderately stronger-than-expected reading it could be difficult to unseat the tariff/weaker dollar themes as the primary driving force for gold.

Not surprisingly the silver market has missed out on the rally seen in gold overnight as it is perceived as an industrial commodity potentially facing demand losses because of additional tariff headwinds. Overnight, holdings of gold ETF's increased by 164,000 ounces while silver holdings were unchanged.

A factor holding back gold prices this morning came from China where their first half gold consumption declined by 3.2% on a base of 523.5 tons. However that negative demand story was partially counter veiled by a first half Chinese gold output decline of 5% on a smaller base of 180 tons.

With a fresh three week high to start and a definitive measure of safe haven sentiment operating, the bull camp has the edge again.

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