Gold & Silver Daily Market Recap: August 14th, 2012

What will be a busy week started with positive U.S data which took spot gold lower below $1600, before bouncing back before the New York close.

Spot gold retreated as strong U.S retail sales figures beat expectations which means QE3 is less likely to happen. US retail sales rose 0.8% in July, this is the first increase since April of this year and beat market expectations of a 0.3% gain. Producer prices gained 0.3% in July, the fastest rate in half a year. Positive signals on the economy could cut the chances of another round of gold-friendly stimulus measures like quantitative easing, printing money to buy bonds; expectations which have supported prices in recent months.

In the European session gold took flight to top at $1617 as poor German data fueled hopes of more stimulus to jump start their own economy. German second-quarter GDP growth at 0.3% beat forecasts of 0.2% but was below last quarter's 0.5%. France's reading of 0.0% was higher than the expected -0.1%. In the UK, CPI, core CPI and RPI all beat their forecast for July the housing price index (HPI) was off. ZEW economic sentiment for the EU and for Germany for August was disappointing to say the least, as did EU industrial production for June at -0.6%, in line with the previous month but below a forecast of -0.5%.

The dollar erased early losses against the euro after the news, though it struggled for traction as financial markets digested the data. The euro remains bearish while it holds below 1.2550.

Spot silver remained below $28.00, dealing to an intraday low of $27.65 following the PGM's lower. Silver remains range bound and will look to gold for its own direction.

The positive development for precious metals has been all sell-offs have been met with swift buying. With liquidity very low during the holiday month of August, as many traders are away from their screens, the majority of the activity has been in the hands of short-term traders looking for small movements to benefit from. With the lack of any major spark to push higher, the yellow metal is to find itself confined in a tighter and tighter range.

August 14th Closing Prices