Gold & Silver Daily Market Recap: August 13th, 2012

A quiet day on the trading front as precious metals drifted lower on a lack of economic data and market making news.

Spot gold turned lower on a lack of fresh news and the yellow metal dipped to $1617, while QE3 remains on the table, the metals have been well supported. Tomorrow starts a deluge of U.S reports that will set the stage for whether or not QE3 will be introduced come September 12th - 13th fed meeting.

On tap for U.S data release begins tomorrow with US producer prices and retail sales, followed by consumer prices, the TICS report, the Empire State manufacturing report and industrial production on Wednesday. Thursday see the initial jobless claims number, which has been anything but steady gyrating between 330,000 to 380,000 still holding below the key 400,000 mark.

"The US inflation number tomorrow will have to come in below expectations for gold to rally - a sub-par figure would be perceived as another incentive for the Federal Reserve to ease monetary policy further" Standard Bank said in its daily note.

Traders continue to watch the eurozone and China for more signs of stimulus. On Friday, China reported that its exports had grown by just 1% in July on the same month of 2011, while new loans fell to a 10-month low. Japanese data released its own disappointing data, which saw preliminary second-quarter GDP growth at 0.3%, far below the expected 0.6% and well under the previous quarter's 1.2%. The country is still in deflation, with prices falling 1.1 percent in the second quarter. This would lead many to believe that both countries will take decisive action with their own form of stimulus, which would lead to higher precious metals prices.

On the physical side, it remains lackluster, but according to Standard bank they expect activity to improve as we head towards September, which they base purely on seasonality.

"We therefore expect the physical market to provide support on price dips rather than push gold through resistance levels."

Spot silver was a quiet trade as the dual role metal traded lower to break $28.00, on Friday the metal tried its hand at the rally game but couldn't break tough over head resistance of $28.40, while gold has rallied, silver remains stuck in its range and will wait for cues from gold for the metal to make up its mind whether its higher or lower.

August 13th Closing Prices