A-Mark Bullion Update
China has grabbed everyone’s attention this week with the Shanghai Composite equity index losing 8% on Sunday night. The equity market over there remains on tenuous ground and participants are wondering how long the government can keep the market afloat. It is interesting to note that equity weakness has not caused a safe haven flight to gold in the region. Physical demand out of China remains weak and the Shanghai gold premium arb versus London spot gold is nonexistent.  This lends credence to the theory that gold is being used as collateral or margin in equity accounts in China and losses in equities need to be fulfilled or maintained with the yellow metal.
Starting on July 10th, gold traded lower for seven consecutive sessions. It is finally starting to consolidate a bit this week. Support is at $1,070 while any brief rally has been sold into around $1,100. Silver has held up surprisingly well during gold’s meltdown. Its current range is defined between $14.50 – $15.00.