Precious metals sentiment is still bearish as the US dollar continues to strengthen against the euro, albeit in a volatile manner.

On Friday, like PGM, silver - the latest victum of declining industrial growth in major economies - saw extreme selling pressure, falling from $14.15 to below $13 in under two hours in early Asian trade. Whilst silver's massive sell-off was triggered by stop losses and technical trading, the gold-silver ratio has been rising steadily over the past month; it's at 60:4, a level last seen in March 2006. Silver will probably recoup some of Friday's losses, but, like PGM, could remain under pressure.

YTD, all four major precious metals are now in negative territory. Gold has lost 4.5%, platinum 7.3%, silver 11% and palladium 19.6%. Further dollar strength would mean that they remain under pressure.

The USD is firmly below $1.4800 after going as low as $1.4660 on Friday. US industrial production data, released on Friday, showed a 0.2% increase in July; the US economy seems ahead of the EU and Japan in the current growth cycle, which should further support the USD.

With rate hikes unlikely in the EU and US, equities should enjow renewed interest from investors. Crude oil, still in decline (WTI dropped below $113 on Friday), should also support equities.

Gold sold off in Asia, down $14 - from $806 to $792. With gold below $800, sentiment remained bearish. In European trade, it went down to $773 just before the AM fix. Gold was range-bound in uncertain trade in New York. It closed at $786.50. Reports of decent retail buying continue to support the metal on the downside. Support for gold is at $786, with $777 - $771 providing secondary support today. Primary resistance is at $799 - $800, and secondary resistance at $806 - $809.