New York 20/07/2012 - Gold futures slid modestly lower in relatively dull US trading on Friday, with a stronger dollar and softer equity and commodities markets generating a modicum of downward pressure. Gold for August delivery on the Comex division of the New York Mercantile Exchange was last down $5.50 at $1,575.90 per ounce. Trade has ranged from $1,572.60 to $1,586.30. "It's an exceptionally light day for data and no one associated with the [US Federal Reserve] is speaking today," a US-based gold trader said." There's just nothing out there that's going to allow gold to decouple from currencies and stocks. Plus it's a summer Friday, so I would expect things to be pretty quiet." In wider markets, the euro was last about three quarters of a cent weaker at 1.2197 against the dollar, while Germany's DAX and France's CAC-40 were down 1.13 percent and 1.49 percent respectively. US equity markets are also set to open lower. As for other commodities, light sweet crude (WTI) oil futures for August delivery on Nymex were down $1.86 at $90.80 per barrel and the most actively traded Comex copper contract was at $3.4525 per pound, down 8.2 cents. In Europe, Spanish 10-year bond yields briefly breached seven percent, a level that is seen as unsustainable, while German PPI came in at a two-year low at -0.3 percent, below expectations of a -0.4 percent reading. With no major US releases today, investors are left with the bad taste of yesterday's disappointing data reports. Initial claims for state unemployment benefits in the US increased 34,000 last week to a seasonally adjusted 386,000 - the forecast was for a 376,000 reading. Nevertheless, the four-week moving average dropped 1,500 to 375,500. US existing home sales slipped 5.4 percent in June to a 20-month low of an annualised 4.37 million units against a forecast of 4.64 million, while the Philly Fed Index at -12.9 came in below the expected -7.9 and the CM leading index was at -0.3 percent. "Ongoing gains in grain prices should be supportive of gold today, but the gold bulls today don't have the added benefit of soaring energy prices in the early US trade action," CME Group said in a market commentary. "While the Asian trade didn't seem to playing up the prospect of another reserve requirement ratio (RRR) reduction from China on Sunday night, it is possible that US gold traders could toss that prospect around just ahead of the US close later today," it added. In gold-specific fundamentals, a poor monsoon season could result in India buying significantly less gold than usual in the second half of the year. Since the rainy season began seven weeks ago, India has seen 22 percent less rainfall than the 50-year average. The rural population accounts for about 60 percent of Indian gold demand and is dependent on crop revenues, Commerzbank said in a note. Also, holdings in the SPDR Gold Trust, the world's largest physically backed gold exchange-traded fund (ETF), fell nine tonnes to 1,257 tonnes yesterday - a six-month low. Over the past two weeks, there have been total outflows of 18.5 tonnes. "In view of this trend, the firm US dollar and the weak gold demand in India, the price of gold is holding its own amazingly well, doubtless thanks to the interest shown by central banks," Commerzbank said. Comex silver for September delivery was down 36.7 cents at $26.850 per ounce. Trade has ranged from $26.740 to $27.295. "With the dollar stronger again this morning, silver is lower too," Standard Bank said. "In fact, in the absence of any important data releases in the next few days, we believe that it will be very difficult for silver to sustain a move higher. "Our view remains unchanged: we are not bullish on silver yet and selling into rallies is still our preferred strategy," it added. Platinum futures for October delivery on Nymex were down $13.10 at $1,410.00 per ounce, while the September palladium contract was at $577.50, down $7.35.

Source