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    JM Bullion Weekly Market Review (7/10/15)

    Posted on July 10, 2015

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    Gold prices are flat in early trade this morning, as stocks move higher on optimism that a last minute deal will be reached to keep Greece in the euro. Oil prices are flat, as well, while the dollar is slumping.

    The euro currency is trading sharply higher this morning on hopes of a deal, although there is a lot of day left before the weekend. Equity index futures are pointing to a sharply higher open today, although whether or not stocks will be able to sustain gains going into an uncertain weekend remains to be determined.

    Stocks opened higher yesterday, as well, but saw much of those gains evaporate throughout the session.

    Investors appear to be hungry for risk today, and gold may see limited interest if stocks remain higher. On the other hand, going into a weekend that could potentially be full of headline risk and may determine Greece’s future in the euro could also drive some perceived safe-haven buying as the session goes on.

    While Greece remains a clear source of concern for markets, recent developments in China are also likely on investors’ minds. After seeing its stock market decline by a third in just a few weeks time, China has taken multiple steps to try to stabilize markets. These steps include suspension of IPOs, brokerage stock-purchase commitments and now a ban on stock sales by major shareholders.

    Trade in Chinese markets has been volatile, and while equity markets are cheering on the recent steps today, that can change quickly. China is, in effect, providing an artificial crutch for its markets. Although this crutch may possibly prevent a larger-scale crash in Chinese equities, investors may begin to focus on the underlying causes, and risk aversion may still set in. Such a scenario could potentially work in gold’s favor.

    Gold remains in a bearish posture, and without some type of bullish catalyst the bears may continue to drive prices lower. The market fell below the $1150 level earlier this week, on what appeared to be fairly heavy volume. This could potentially be indicative of a near-term bottom, although the market has yet to bounce in any significant way.

    The fact that gold is not seeing more buying interest today given the sharply lower dollar is a cause for concern and appears to be indicative of the general lack of bullishness. That can change quickly, however, and events this weekend in Greece could potentially drive gold even lower, or give the market some life.

    All Market Updates are provided as a third party analysis and do not necessarily reflect the explicit views of JM Bullion Inc. and should not be construed as financial advice.