Gold traded mostly sideways yesterday. Apart from a $10 jump up towards the end of Comex trading and then an equal slide down early on the Globex, it was a tame day. The yellow metal closed at $912.30/oz., up $3.20. Overnight, gold is trending lower.
Platinum took off late in Hong Kong yesterday, adding about $16. The rest of the day it trended slightly down to end at $1106/oz., up $9. Overnight, platinum is little changed.

Silver didn’t do much through Hong Kong, but started a roller coaster ride in London that lasted through the Globex only to end the day little changed at $12.82/oz., down 3 cents. Overnight, silver is trending lower. (Click here for charts)

“Summer inertia” has hit gold-market speculators according to Edel Tully at London dealers Mitsui.

“We believe [the Gold Futures] market remains overly long and further liquidation desires remain in the wings. Until this passes, gold does not have another internal driver to force it northbound,” wrote Tully.

Official data seems to support Tully’s belief. The ‘net long’ position held by hedge funds and other speculative players in U.S. gold futures and options has shrunk by almost 20% from early June’s 11-month high.

But don’t expect the waning demand for gold to last too long.

“In the near term, day to day moves continue to be influenced by the direction the dollar takes,” Lin Haoxiang, analyst at Guotai Junan Securities, said from Shanghai yesterday. “In the longer term, inflationary expectations remain.”

In company specific news, Brazilian mining giant Vale has signed an agreement which could see it take a 60% stake in Australian gold junior Intrepid Mines.

In a statement, Intrepid welcomed the signing of the Heads of Agreement (HOA) with Vale Exploration (NYSE:VALE), giving the company an option to acquire rights in Intrepid’s Tujuh Bukit project in east Java.

“Under the terms of the HOA, Vale could earn a 60% shareholding in a joint venture company holding the rights to the Tujuh Bukit project by, amongst other terms, spending a total of $US40 million ($A51.05 million),” Intrepid said.

Intrepid shares were up nearly 13%, to 30.5 cents on the news.

Source: ‘Summer Inertia’ Hits Gold

Last 5 posts by Doug Casey

• Resource Stock Roundup:Monday, July 27, 2009 - July 27th, 2009
• Base Metals Higher - July 27th, 2009
• Crude Continues to Climb - July 27th, 2009
• Dollar Moves Lower - July 27th, 2009
• Gold Pushes Through $950 - July 27th, 2009