General bearish bias from outside market forces

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General bearish bias from outside market forces

With a fresh new high for the move in the dollar to its highest level since March 15 yesterday, the gold market is short term overbought and is facing ongoing currency-related pressure. Surprisingly, silver has avoided the pressure seen in the early gold trade, thereby signaling its continued focus toward physical commodity fundamentals instead of financial/currency related factors. Gold and silver should see minimal support from a continued slide in US interest rates today.

MARKET IDEAS: While it is a close call predicting today's direction in gold and silver, we leave the edge to the bear camp. Outside market influences, disappointing Chinese economic news, and a stronger dollar gives the bears several themes. The rally in August gold yesterday has left the market vulnerable to a quick setback to $1950, with silver vulnerable given a slightly overbought condition from the $0.87 rally off last week's low.

MARKET IDEAS: The copper market needed a short covering bounce to balance short-term oversold technical measures. The fundamental bias remains negative today unless market euphoria emerges from passage of the debt ceiling agreement, but given negative Chinese manufacturing PMI data, the bear camp has a chance to push July copper below $3.60.Follow @KitcoNewsNOW mark@hightowerreport.com www.hightowerreport.

 

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