Metals market update for July 31

July 31, 2015 10:57 AM

Today’s AM LBMA Gold Prices were USD 1,080.05, EUR 985.45 and GBP 694.19 per ounce.

Yesterday’s AM LBMA Gold Prices were USD 1,085.65, EUR 989.74 and GBP 695.36  per ounce.

Gold and silver on the COMEX fell 0.9% and 0.4% yesterday – to $1,088.10/oz and $14.74/oz.

Silver for immediate delivery has fallen 1.1% to $14.66 an ounce, poised for the biggest monthly retreat since September.

Platinum fell 1.4% to $978.05 an ounce and July’s 9.6% drop is set to be the biggest since 2012. Palladium declined 2% to $611.45 an ounce, heading for a third monthly loss.

Gold is down for a sixth week in a row, on course for its longest losing streak since 1999. It is down more than 7% in July, the most in any month since June 2013. Sentiment is as bad as we have seen it and some suggest it is as bad as in 1999 and 2000 after the 20 year bear market.

Extreme negativity appears to be already in the price and weak hands have been shook out of market. That is not to say that gold cannot go lower and we remain cautious in the short term.

Gold remains vulnerable as we enter August – a month of declining liquidity when markets may be vulnerable to bear raids. Lower prices are possible and the $1,000 per ounce level may need to be tested before we see a bottom.

                                                                Gold in USD – 10 Years

Bullion looks good value at these levels and investors will soon be presented with an opportunity to allocate funds to bullion at very depressed prices. Dollar cost averaging and gradually accumulating remains prudent and will protect against downside risk.

Stocks, bonds and many property markets are at all time highs and look very toppy and vulnerable to sharp corrections – particularly in September and October – the traditional time for sharp stock market corrections and indeed crashes.

It is a good time to rebalance and to reduce allocations to risk assets and increase allocations to gold – or indeed allocate to gold for the first time, if an investor does not own gold … as the vast majority of investors do not given the very low levels of gold ownership among investors in the western world.

Many of the risks that preceded the 2008 crisis are bubbling under surface and new global debt crisis is coming … the question is when?

Physical gold will again protect and grow your wealth in coming years. We know we will be accused of  ‘talking our book’ and Martin Armstrong may call us ‘gold promoters’ but we genuinely believe and the academic research, empirical data and historical record shows that gold is a safe haven that will protect investors in the long term again coming volatile months and years.

About the Author

Mark O'Byrne is executive director of Ireland-based GoldCore.