Spot gold remained locked in its trading range of $1568 to $1585 unable to sustain any meaningful rally while trading deeper in its triangle formation.
There was a boat load of data released in China, U.S and Europe largely on the negative side which pushed the metals complex lower. China's July HSBC flash manufacturing PMI came in at 49.5 against June's deeper contraction of 48.2, France's July flash manufacturing PMI was 43.6 versus a forecast of 45.6, while Germany's was 43.3 versus a predicted 45.3.
In the U.S things were slightly mixed as flash manufacturing PMI for July came in at 51.8 falling far below the predicted 52.2 and well below the previous reading of 52.5 points. In the positive Home price Index came in better than the expected 0.5% at 0.8% but the Richmond manufacturing index offset the positive data coming in at -17 was very bearish.
The euro dollar traded sharply lower once again vs. the greenback. The single currency hit yet another 2 year low at 1.2040, currently the pair is looking to trade to its June 2010 level of 1.1870 and expect to see stop loss selling around that level. The major catalyst for the sell off was credit ratings agency Moody's changed its outlook on Germany's triple-A rating to negative
"Precious metals remained under pressure for the better part of yesterday as eurozone fears kept the dollar well supported," Standard Bank said
As the U.S dollar rallies it puts downward pressure on metals as strength in the greenback is a negative for dollar-denominated commodities like metals because it makes them more expensive for holders of other currencies and for the time being with the chaos in the Eurozone the green back could be the flavor. Metals at the moment are acting as risk assets and for now risk is off the table.
Spot silver remains status quo trading in its own range and remaining there. $26.50 provides some support, with the major support at $26.00.