Salient to Investors:

Hedge funds are the least bullish in 6 years and ETP holdings dropped to a 3-year low. The US Mint sold 19 percent fewer ounces of American Eagles in June than in May and 73 percent less than in April. Australia’s Perth Mint said coin and bar sales dropped for a second month in June.

Mark O’Byrne at GoldCore said a gold recovery will be tentative initially but a return of the euro zone debt crisis could spark a more sustainable rally, and many jewelers will to use the recent price falls as an opportunity to stock up.

Standard Bank said rising premiums for gold in China signal strengthening demand. Commerzbank said premiums rose in India, in part because of government import curbs.

Dominic Schnider at UBS said ETP assets may fall another 500 tons.

Goldman Sachs Group says gold will fall to $1,050 by the end of 2014, Credit Suisse predicts $1,150 in 12 months and Danske Bank predicts $1,000 in 3 months.

Mark Cutifani says production cuts will be larger than most investors expect and boost prices.

UBS said investors should reduce their holdings in raw materials and buy equities, rating industrial metals as underweight in part because of slower growth in China. UBS, Citigroup, and Goldman Sachs say the commodities super cycle has ended.

Nicholas Brooks at ETF Securities said many commodities are trading at or below the marginal cost of production. which may not stop prices from falling short-term, but medium-term rising costs will ultimately move prices higher.

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