, IncJuly 23, 2010 - After a London peak at 1200 earlier in the day, spot gold sunk below 1190 during NY trading off the European bank stress test announcement. Look for physical buyers to maintain a level of price support around this week’s low of 1180.
With the Euro still trying to stabilize after its 2+month struggle with the Greek economy’s chaos and the USD still uncertain across major currencies, expect resistance to remain at around 1200. We’ll need to see more momentum before calling a break back up into the middle ground between June’s highs and this week’s lows.
Traditional correlations for gold remain unreliable as world markets still look for consistency and recovery off the Euro zone crisis and the redefinition of the USD. Chart analysis mirrors the market for now with current consolidation continuing in the 1180 to 1195 range in what could be a classic head-and-shoulders formation before an eventual uptick.
In production news, China, the world’s largest producer, reported a 6% increase on production numbers from the first half of last year. Canadian miner Red Back announced a 9 percent cut off original year-end production estimates due to water line damage at its Mauritania mine. The company expects ounce recovery on the loss in 2011. Zimbabwe’s largest producer, Metallon, announced plans to raise yearly production to 250,000 ounces per year in the short-term, 500k in the mid-term, and 1,000,000 ounces per year in the long-term in keeping with worldwide demand. Constitution Mining Corp announced the discovery of two major fluvial channels at their Peruvian Golden Sands site. Both channels contain gold grades well above the company’s mg per cubic meter standards for production. Production worldwide still on scheduled uptick toward 2012.
Stewart Lawson
Senior Staff Writer - GoldPrice.net
