Gold will continue to weaken this month, coming under assault from a stronger dollar and concerns about the Chinese economy, INTL FCStone said in its monthly market report. The broker sees gold retesting its March 2015 low of $1,140 per ounce at some point this month, with stops possibly taking the precious metal lower – even as low as $1,100. On the upside, $1,190 should prove to be good resistance, it said. The spot gold price was last at $1,164.2/1,165.1, up $6.40 on the previous close. Of the two drivers – a stronger dollar and a stuttering China – the decline in the local Chinese equity markets is far more important, the broker said. Regulators have intervened several times in recent sessions to halt the precipitous fall in equities – the Shanghai Composite Index had fallen around 35 percent since mid-June. Beijing most recently urged executives to buy more of their own shares while banning those holding stakes of more than five percent from selling any of for the next six months. This helped the SCI to close up 5.7 percent today although there are concerns that it could be a temporary bounce and that further falls could follow. The washout will reduce the “wealth effect� that was permeating through the Chinese investing public up to mid-June and will probably lead to a reduction in discretionary buying in jewellery, the broker said. Moreover, holdings in gold ETFs are mostly falling and the latest CFTC report shows that the overall long position held by US funds has slumped by almost half in the last week, it said. As for the other precious metals, silver will see more weakness this month – INTL FCStone sees it in a $14.20-15.80 range. Spot metal was last at $15.41/15.46 per ounce, up 34 cents. Platinum will also trade lower in a $980-1,080 range, the broker predicted. The metal recently traded at $1,025/1,030, down $3. Palladium will also lose further ground in July to a $600-$710 trading range – on the spot market it was last $9 lower at $644/649. - See more at: http://www.bulliondesk.com/gold-news/focus-gold-to-fall-further-july-chinese-equity-slump-weighs-intl-fcstone-97532/#sthash.1XRU4Yk9.dpuf

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