By Barry Stuppler – MintStateGold.com

GOLD

Ahead of the holiday weekend, gold seems to be settling into a nice narrow trading range of $1810 to $1840 on average volume.  Lightening up on the volatility is healthy for any commodity market, and would put off any margin increases.  Gold’s price support is coming in the face of a sizeable rally in the value of the U.S. Dollar versus the Euro, which is normally bearish for gold. At 11 am PDT gold is trading at $1,827.90, down $6.90 per ounce on light volume.

During the month of August, Gold was up $203.40, or 12.49%. Not a bad return considering August is typically one of the most lackluster months for gold and silver. Typically during August trading volumes normally are at yearly lows and the price volatility is very light because many traders are on vacation. The US Mint sold 112,000 troy ounces of gold eagles in August, the highest sales since January.  As we roll into September, I anticipate the precious metal trading volume will pick up dramatically.

Federal Reserve Bank of Atlanta President Dennis Lockhart said the Fed should be ready to consider more monetary easing, even while it can’t be expected to eliminate some of the forces impeding economic growth. “Given the weak data we’ve seen recently and considering the rising concern about chronic slow growth or worse, I don’t think any policy option can be ruled out at the moment,” Lockhart said today at a speech in Lafayette, Louisiana. “However, it is important that monetary policy not be seen as a panacea.”

SILVER

I have been seeing excellent price consolidation in the silver market in the past week. We are in a nice narrow trading range of $40.00 to $42.50, with excellent support at the low end of the range. At 11am PDT Silver is trading at $41.58, down $0.14 per ounce on the day with light volume.

Other Important news that affects precious metal prices:

  • The Commerce Department reported that the outlays for U.S. construction projects fell 1.3% in July, the largest decline since January.
  • The US Labor Department reported today that new applications for unemployment compensation fell by 12,000 last week to 409,000. Initial claims from two weeks ago were revised up to 421,000, from an original reading of 417,000.
  • Manufacturing activity in the 17-nation euro zone contracted more than initially thought in August, sending the purchasing managers index for the sector to a two-year low, according to data released today.
 

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