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

The weakness from last week has carried over as spot gold has dropped to a two week low of $1755 amid more Eurozone worries.

Spot gold remains slightly lower and range bound as the market tracked currencies with a strong greenback after the positive release of the U.S employment numbers last Friday. There has been little in economic news this past week for the U.S as traders await the release of the U.S beige book. With that being said, the U.S. economy is still struggling. The unemployment rate remains elevated at 7.8%, manufacturing remains slow the people which are working their salaries are trailing the inflation rate. Gasoline is stubbornly high despite the lower crude price. The next big item is the fiscal cliff which could take affect 2013 if congress doesn't act, which means tax increases and deep spending cuts will take effect in January.

Let's throw in Europe as European shares fell for the third day in a row Wednesday, and the euro came under fresh pressure along with Spanish and Italian bonds, as economic anxiety was compounded by stuttering progress in the eurozone’s battle against its debt crisis. Europe's economic slide seems to have no end in sight as countries such as Greece and Spain are suffering from high debts and weak banks. Greece, Ireland and Portugal have already needed bailouts. Violent protests against German Chancellor Angela Merkel when she visited Greece on Tuesday underlined how far the debt crisis is from resolution.

The stage has been set for precious metals to rally; we have seen the metal take flight over the last month to reach the years highs of $1790, while the metal couldn't hold we have seen great "dip" buying toward $1750. The winner in all this will be gold as investors look for a safe haven, expect good buying even if we trade back to $1735 as funds look to re-position money in this the last quarter of the year.

Spot silver has seen the same price action as gold retracing back to $33.35, but has found support and remains steady at $34.00. Expect like gold to be good buying as the metal approaches $32.80.

October 10th Closing Prices