Gold & Silver Daily Market Recap: August 30th, 2012

After starting the session relatively higher, metals succumbed to profit taking ahead of Fed Chairman Ben Bernanke's speech at Jackson Hole symposium of central bankers, which started today.

Spot gold was looking poised to remain steady to higher starting off the North American session at $1664, a release of key U.S economic data, while not having a profound effect still managed to keep traders from adding to positions. Among the economic releases this morning were Initial Jobless Claims, Personal Spending, Personal Income, and Personal Consumption Expenditure and most figures printed slightly under or right at targeted expectations. The biggest of those were the new US unemployment claims, last week rising to 374,000, above a forecast of 370,000 and the previous week's reading of 372,000. While these numbers aren't earth shattering, it is showing an economy that is stuck and not growing at a rate. U.S equities turned lower as well as oil which reacted to the U.S data. Volumes in the gold market remain well be normal as traders show some restraint ahead of tomorrow's 10 am Bernanke speech.

In Europe the situation remains status quo as it was decided that the European Central bank would not attend Jackson Hole as they are still trying to hammer out their own form of QE. It what could be a positive sign as Premier Wen Jiabao stated that Beijing is prepared to purchase more European bonds despite the worsening debt crisis. This came after a meeting with German Chancellor Angela Merkel. This is seen as a positive sign as  China is willing to back Europe, the European Central Bank show its own support by announcing the bond yield cap.

Spot silver back tracked after hitting a 4 month high of $31.25. The metal still remains poised to move higher as traders decided to book profits ahead of the Jackson Hole tomorrow. The main support for silver lies at $29.91, it took quite a push for the metal to clear that so a break below would turn the market back to negative. The market remains neutral at this point.

We now are at the hands of Ben Bernanke, if the market is waiting for Mr. Bernanke to announce QE3, I think they are way off on this one. What is going to hold metals prices and ultimately push them higher is the European situation and how it’s handled which would give the Euro dollar a lift and physical buying. Expect Bernanke to use some of the same language he has used at past speeches. The QE3 talk hasn’t been fully priced into the market so expect if there is no announcement a drop in metals prices. Gold remains well supported at $1650, and $1640.  All markets across the board are in for some fireworks tomorrow morning.

August  30th Closing Prices