Gold & Silver Daily Market Recap: August 24th, 2012

After a 7 day rally precious metals took a breather consolidating. The yellow metal touched a 2 month high yesterday of $1674 on the back of a much stronger euro and quite possibly further quantitative  easing at the next Fed meeting.
Spot gold held its gains to close out the week with the major catalyst for rally was the release of the minutes from the July 31-August 1 meeting of the Federal Open Market Committee, which indicated that additional monetary accommodation (QE3) would be warranted “fairly soon” unless there was a “substantial and sustainable strengthening” in the pace of the economic recovery.
"We don’t believe that the current gold price reflects further QE yet. We believe that the current gold price reflects fair value. Even before the release of the FOMC minutes on Wednesday 22 August, we estimated fair value for gold at $1,650 — a level we’ve been targeting from mid-May" Said Standard Bank

It was a busy week for U.S data releases, it was generally a variety of positive economic figures including New Home Sales gained 3.6%, with Housing Price Index showing .7% increase and Markit Manufacturing PMI came in at 51.9. Thursday saw the Initial Jobless claims tick slightly higher. Initial jobless claims jumped to 372,000, or an increase of 4,000 over the revised 368,000 seen last week. US Durable Goods Orders provided another upbeat mood as they beat consensus coming at a 4.2% rise while only 1.6% was forecasted . The upbeat data was due to the Core reading of the report. When transportation was excluded, Durable Goods Orders actually declined 0.4% while a 0.5% rise was expected. Therefore, the cloudiness of whether QE3 is still a possibility remains.
Europe remains on the front burner with a report from the German Finance Ministry stating that Germany would temporarily leave the Eurozone to get their "financial house" in order. The Euro dollar has seen a strong rally over the past 7 days, but if this report is accurate expect the single currency to turn lower.
Spot silver has again made it back into the news. The dual role metal has rallied over 9% over the past 7 days and is looking poised to extend those gains. The metal has also followed gold and the PGM's higher with disruption still ongoing in South Africa. The grey metal touched $30.84, before profit taking took the wind out of the rally. it still remains well above uptrend line of $29.91 which now acts as support.
Next week is a very busy week with the FOMC meeting taking all precedence. If Fed Chairman Bernanke decides that QE3 is not warranted at this time expect a sell-off in the metals. The sell-off will be short lived as problems still persist in China and Europe.


  Gold Silver
Support $1640/$1600 $29.91/$29.00
Resistance $1690/$1684 $31.50/$32.50


August  24th Closing Prices

Gold $1670
Silver $30.61
Platinum $1553
Palladium $652




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  • Johnson Matthey
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  • Engelhard
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