Gold & Silver Daily Market Recap: August 3rd, 2012

So yet another Non-farm payrolls has come and gone, the fireworks were set to a minimum. The initial reaction was a sell-off, which we thought but that didn't hold and gold rallied to $1607.

The US data showed that 163K jobs had been created in July; this was by far the best month since February and clearly beat the forecast of 101K.  The June figure was revised down to 64,000 from 80,000 which leaves the 163k to 147k. Expect another revision for August.

Spot gold initially sold off and what we would have thought would have been a mass liquidation turned it to the yellow metal touching support at $1585 and bouncing. All this was aided by a much weaker US dollar. The Dow Jones Industrial average was gaining prior to the release and gained much more after. What was lost in the numbers was the fact that the unemployment number ticked up to 8.3%, which can be attributed to a large increase in the labour force.

Yesterday's lack of firm commitment from ECB President Mario Draghi put metals squarely on its heels and traders, ok maybe it was just us looking for the downward trend to continue. President Mario Draghi said during a press conference that the "euro is irreversible" and that the ECB may "undertake outright open market operations of a size adequate to meet its objective" but conceded that the central bank must still "design the appropriate modalities" for such policy measures. It would seem like he was just posturing. The Euro/USD gained strength in the European session and continued into the North American trade as it touched a 1.2392. Regarding the Euro, it has been bearish for 3 straight months we see this as no more than a relieve rally and would expect traders are selling into these rallies.

In Spot silver news, while gold sold off this morning, silver surprisingly held its range not breaking below $27.00. The gold silver ratio continues to respect its range and looking for its own potential break out.

The market pretty much is where we started before this big week, gold has again closed back above $1600. Our initial thought was that we would have a $30 move either way, gold only managed to rally $18 but had a $22 range. The market now sits and waits for the next Fed announcement set for September 12-13 in Jackson Hole as this should give Big Ben enough time to analyze the data for August. Expect the market to trade range bound until then. Since May, gold has been making higher lows.

August 3rd Closing Prices