The Metals:

Gold dropped $8.89 to $1291.71 just after this morning GDP announcement before it bounced back to $1303.12 and then fell back towards its earlier low by late morning in New York, but it then rallied back higher in afternoon trade and ended with a loss of just 0.3%.  Silver fell to as low as $20.45 at one point, but it then bounced back higher in the last five hours of trade and ended with a gain of 0.1%.

Euro gold fell to about €968, platinum lost $2.40 to $1472.60, and copper climbed a couple of cents to about $3.24.

Gold and silver equities fell about 2% by late morning before they rallied back towards unchanged by midafternoon and then dropped back off again, but they then edged back higher in the last half hour of trade and ended with only about 1% losses.

The Economy:

The fed cut its monthly bond-buying program by another $10 billion and upgraded its assessment of the U.S. economy.  They did note however that:

"A range of labor market indicators suggests that there remains significant underutilization of labor resources."

Text of FOMC statement on interest rates  MarketWatch

Fed Sees Labor-Market Slack Even as It Trims Bond Purchases  Bloomberg

Worker Pay Is Smaller Slice of U.S. Income Pie as Dividends Jump  Bloomberg

Mortgage applications fall in latest week: MBA  Reuters

Tomorrow brings Initial Jobless Claims, the Employment Cost Index, and Chicago PMI.

The Markets:

Charts Courtesy of http://finance.yahoo.com/

Oil fell after the Energy Information Administration reported that crude inventories fell 3.7 million barrels, gasoline inventories rose 400,000 barrels, and distillates climbed 800,000 barrels.

The U.S. dollar index found decent gains on better than expected GDP data that sent treasuries lower, but those moves pared a bit after today’s dovish fed statement.  Today’s $29 billion 7-year note auction sold at a yield of 2.25% with a bid to cover of 2.58.

The Dow, Nasdaq, and S&P waffled near unchanged and ended mixed.

Among the big names making news in the market today were Bank of America, Carlyle Group, IEX, Thomson Reuters, Hess, IBM, Sprint, Twitter, and Toyota.

The Commentary:

“Today's stronger than expected Q2 GDP number (4% compared to expectations of 3%) has ramped up selling in the longer dated section of the curve. The long bond is down over a full point as I type these comments. The Dollar is also benefitting, particularly against the Yen today, as forex traders are buying it and selling the rest of the majors. Talk has now shifted (at least for today) firmly in favor of higher interest rates coming to the US before any of the other industrialized nations.

Take a look at the daily chart of the US Dollar (USDX). Note that the greenback has run right into the zone of heavy chart resistance pictured on the chart. That resistance zone is a function of a downside gap made all the way back in September of last year. The gap has served to cap the Dollar's upward movement for nearly a year. Seeing it challenged today is therefore something that should not be ignored. If the Dollar can punch through this level on a closing basis today, and then repeat it tomorrow, we should see some additional buying come in.

The ADX is showing a decidedly bullish chart picture with the bulls firmly in control of the market. The indicator itself is above 30 and rising - evidence of a strong bullish trend. If that resistance zone does give way as noted above, this thing could turn into something stronger on the intermediate term charts. Above 81.60 there is resistance at 82 and again near 82.50.

Here is the chart of the long bond. It seems to have reached its zenith near the 139 level. Today's GDP number was simply too much for the market to extend any higher. We have a ceiling now at this level for the time being meaning it will take some sort of safe haven event to kick the ceiling down or some very bad economic news from somewhere. The indicator is turning down and getting ready to confirm the negative divergence that was created recently. We'll have to see whether the bonds are setting up a range trade or whether this is the start of a longer lasting downtrend. It is far too early to assert the latter with any dogmatism.

Copper is benefitting from the stronger GDP number.

Hog prices continue to reel from traders reassessing the overall impact from the dreaded PED virus. Record heavy weights are offsetting most, if not all, of the impact of the disease on the slaughter numbers. I mentioned repeatedly over the last few weeks for hog producers to get some hedge protection on expected Q4 and Q1 2015 production while record prices were being seen. I hope some of you hog producers out there took that to heart. I have similar concerns about the cattle at this point. Cattle producers are basking in record profits right now but these things do not last forever. Do not be penny wise and pound foolish. Get some hedges in place on expected future production while you can. Do not wait until you HAVE TO get the protection. Speculators - I am speaking to producers right now.

Bean prices are giving up the gains from their recent rally that was due to heat and dryness talk. Bulls talk that up every season so that is not new. The forecasts however are showing some rain entering the mid-West next week and with no searing hot temperatures anywhere in there, growing conditions remain very good for the majority of the crop. Yes, there are some areas where the crop deteriorated slightly (I noted that on my Monday take on the USDA Crop Conditions ratings) but those small pockets cannot detract from the fact that the majority of the crop is still in very good shape.

Look at what continues to happen in the overall commodity sector...

It is showing a loss on the year at this point. Simply put, those investing in commodities as an asset class this year, particularly those looking for inflationary pressures to show up, have been on the wrong side of the complex. Now of course that could change but the fact is that while overall economic growth globally has been okay, it has not been strong enough to power the sector higher. Demand is not there as it once was. We'll have to see if growth can pick up from current levels.

A stronger Dollar threatening to move into a sharper uptrend and falling commodity prices do not augur well for higher gold prices. As stated here yesterday, it is geopolitical events that are keeping gold above the $1280 level right now.”- Dan Norcini, More at http://www.traderdannorcini.blogspot.com/

GATA Posts:

Jay Taylor interviews GATA secretary and analyst Jensen on price suppression

The Statistics:

Activity from: 7/29/2014

Global Gold ETF Holdings

[WGC Sponsored ETF’s]

Note: No change in Total Tonnes from yesterday’s data.

COMEX Gold Trust (IAU) Total Tonnes in Trust: 165.66: No change from yesterday’s data.

Silver Trust (SLV) Total Tonnes in Trust: 10,014.63: No change from yesterday’s data.

The Miners:

Randgold’s (GOLD) meeting in Mali, Barrick’s (ABX) dividend, Primero’s (PPP) project update, Turquoise Hill’s (TRQ) sale of its 29.95% stake in SouthGobi Resources, and Excellon’s (EXN.TO) second quarter results were among the big stories in the gold and silver mining industry making headlines today.

WINNERS

LOSERS

Winners & Losers tracks NYSE and AMEX listed gold and silver mining stocks that trade over $1.

Please see Yahoo’s Mining/Metals News Wire for all of today’s mining news.

- Chris Mullen, Gold Seeker Report

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• http://www.capitalupdates.com
• http://www.goldseek.com
• http://www.silverseek.com
• http://www.goldreview.com 

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