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Gold futures market

Gold futures continued to climb higher once again yesterday with the August rally gaining momentum as the fear of a double dip recession continues to loom in the background, helping the precious metal ever higher as a result.  The present rally does not appear to be driven by the usual supply side issues such as the lost production in South Africa over the past few weeks or the ongoing labour dispute, but rather by macro economic concerns.  This aspect is further evidenced by the increase in production from China which again has had little impact on the price of gold futures in the last few weeks.

With little in the way of fundamental news in the US today gold futures may take their lead from US equities and perhaps even the currency markets, with US equities in particular beginning to look weak and as they continue to trade sideways.  In addition the gold futures market is beginning to see increasing demand from India as we run into the festival season which should help to push gold futures higher as a result. Comex gold stocks were down 5228 ounces at just over 11m ounces which has seen gold stocks decline in 11 out of the last 20 days.