Gains in the gold and silver markets so far this week have been measured but steady. In fact, all precious metals moved higher yesterday with increased physical demand in China to blame. Given continued uncertainty in Washington, many investors on the bullish side of metals believe that soft economic data is coming soon for the U.S., which will in turn bring us a softer dollar and stronger precious metals prices.

While some traders might be put off by the latest Reuters poll which pegged gold prices this year to basically equal last years average price the same poll projected prices up to $1,292 next year. The gold market might draft some support from Trump threats of US sanctions against Venezuela in the event that the country changes its constitution in a manner that consolidates power to the ruling party and away from democracy. However, traders should guard against excessive optimism as a well-known gold analyst has now turned bullish after a low to high rise of $32 an ounce in just six days.

At least in the short term, direction in the gold market looks to shift back toward the ebb and flow of the dollar and to a lesser degree to Venezuela and BREXIT situations. Overnight holdings of gold by SPDR registered a decline of 1.77 tons and they reached the lowest level since February 7th. While we aren't sure what the actual implication will be of a forced merger between a large Chinese mining conglomerate and a Chinese metals trading entity it appears as if the Chinese government is attempting to force changes in the mining sector.

Global equity markets were mixed overnight with Chinese stocks recovering from losses Monday and the rest of the worlds markets generally weaker. The Asian session featured the June Chinese home price index which showed a very impressive gain of 10.2% in May while the European session started out with June UK inflation data that held steady at a 2.9% year-over-year rate and that was seen as slightly worrisome. The July ZEW surveys from Germany showed some weakness with sentiment and current conditions figures softening.

The North American session will start out with private surveys of same-store sales, followed by June readings for the export price index and import price index which are both expected to see improvement from their May readings. The July NAHB housing market index is forecast to hold steady at June&#39s 67 reading. Another busy day of earnings announcements will include Johnson & Johnson, Bank of America, Novartis, United Health Group, Goldman Sachs and Lockheed Martin before the Wall Street opening while IBM and CSX report after the close.