Gold & Silver Daily Market Recap: July 10th, 2012

Another quiet day on the metals market with light volume as spot gold look to trade well above $1600 before better than expected U.S data took the metal sharply lower.

A lackluster day with lows volumes had spot gold moving in wide ranges, in the early session the yellow metal was looking to test well above $1600 touching $1601.  This was after dovish comments from Federal Reserve Bank of San Francisco president John Williams, he stated that "The US central bank has the option of implementing a third round of quantitative easing to bring down the high unemployment rate and spur economic growth" He went on to say  “We’re really right at that edge; if economic data continue to come in below expectations and if our view is that we don’t expect to make progress on our mandate, then I would think we need more accommodation.” The metal took flight trading to $1601, but the euphoria didn't last long as the metal quickly turned lower after the release of IBD/TIPP economic optimism for the US which printed higher to 47.0 from 46.7 beating a forecast for a reading of 46.9.

The market is jittery and seems to be reacting to any news with most traders deciding to hold out until the end of the month when the FOMC delivers its minutes. The US Federal Open Market Committee will hold its two-day policy meeting from July 31 which many are betting QE3 will be discussed.

The euro doesn't seem to be getting any relief despite positive overnight developments as Eurozone finance ministers agreed overnight to lend Spain 30 billion euros by the end of the month. These positive developments had some traders covering shorts pushing the single currency to 1.2334, but that as well didn't last long pushing the euro to new lows of 1.2233.

The metal continues to track outside markets such as equities as the Dow Jones industrial average was eking out small gains until it as well turned lower. The U.S is still in favor, but we must always remember the U.S is the largest debtor nation in the history of the world. They have staggering debt problems that cannot be solved by QE3, QE4 and so on. That is tenet for the metals to rally over a long period of time; it has just entered into a correction mode after and 11 year run. Those that can withstand this correction will see the light at the end of the tunnel.

Spot silver was moving higher to $27.60, before turning with equities, the euro dollar and base metals lower. The dual role metal broke $27.00 to touch and trade at $26.83. The gold silver ratio seems determined to trade back to its September 2011 high of 60.49, as its range bound for the time being.

July 10th Closing Prices