The Metals:

Gold dropped $24.54 to as low as $1262.76 by midmorning in New York before it bounced back higher at times, but it still ended with a loss of 1.72%.  Silver slipped to as low as $19.093 and ended with a loss of 1.64%.

Euro gold fell to about €964, platinum lost $13 to $1406, and copper remained at about $3.15.

Gold and silver equities fell about 3% by late morning and remained near that level into the close.

The Economy:

U.S. factory activity expands in August at fastest pace since April 2010: Markit  Reuters

Tomorrow brings Factory Orders and the fed’s Beige Book.

The Markets:

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

Oil fell over 3% on the outlook for waning energy demand.

The U.S. dollar found decent gains as the euro fell on speculation for more monetary easing from the ECB.

Treasuries fell on better than expected economic data.

The Dow, Nasdaq, and S&P traded mostly lower on uncertainty about central bank policy.

Among the big names making news in the market today were Halliburton, Dollar General and Family Dollar, Norwegian Cruise and Prestige, and Select Income and Cole.

The Commentary:

“Geopolitical events had been supporting gold of late but those can only carry the metal so far when several fundamental factors were acting as a strong headwind against a further rise in its price.

We have mentioned falling inflationary fears as evidenced by the TIPS spread, falling commodity prices as evidenced by the GSCI and a stronger Dollar, not to mention a stock market than continues to make all-time highs.

We have had reports of falling demand for gold but those were being ignored as traders chose to focus on events in Ukraine, Iraq/Syria, and to some extent, Gaza.

Apparently today was the day that those who were buying gold based on geopolitical events threw in the towel.

With the US Dollar trading above the 83 level on the USDX and with crude oil plunging nearly $3.00 at one point, if inflation fears were the reason some were buying gold, those fears evaporated today. The ISM number only fueled further talk of higher interest rates in the US. When one contrasts that sort of talk with chatter that the ECB may actually move to lower rates, it is not hard to understand why the Dollar is rallying. Rates in Japan are certainly not going to move higher any time soon.

The Aussie has been moving in a tight range between 94 and 92 against the US Dollar for nearly 5 months now. It will be interesting to see whether this key commodity-based currency will undergo some sort of breakout from that range.

From a technical analysis standpoint, the Dollar is in a strong trending move higher as evidenced by the ADX over 50. While the Euro is trading down slightly, the bulk of the gains in the Dollar today have been at the expense of the Yen, and the various commodity currencies.

Gold fell through chart support at last week's low and remains below that level as I type these comments. There is some light support near the $1260 level with stronger support near $1240. Indicators are negative at the moment with the ADX indicating the lack of a clear trend with more of a grinding type move lower.

Beans are trading higher as bulls talk up the recent rains as being excessive and hurting quality in some locations. That remains to be seen. Early harvest reports from the South are strong. The market may have to wait until closer to harvest before deciding to wring out what is left of any weather premium in both corn and beans. Heat/warmth now to finish the crop are what are needed as rains have ensured adequate moisture in most growing regions. I have not seen any forecasts of an early killing frost at this point.

We'll get the crop condition/progress reports this afternoon as they were not published yesterday due to the Labor Day holiday.”- Dan Norcini, More at http://www.traderdannorcini.blogspot.com/

“Is it just me or does it feel like gold and silver is stuck in a Groundhog Day like syndrome?

Up until today’s trading, one could say the cup was either half-full or half-empty.

The half-full argument was:

• Holding its own despite one record after another in its arch-enemy- financial assets (stocks and bonds)
• Underpinned by seemingly increasing geopolitical concerns
• Building a multi-year base after a vicious correction

The half-empty argument was:

• Unable to get any headway thanks to record new highs in stocks and bonds.
• Inability to breakout on increased geopolitical concerns
• Stuck in a trading range for 18 months.

So same factors could have been perceived bullish or bearish. Today’s decline obviously makes the bearish argument the flavor of the day.

What do I think? After the last 3 years of trading, I pretty much feel like this when it comes to gold and silver.

I do think Clive Maund has done a good job on the technical side of things. My cycle work is looking for a big time low in September timeframe so perhaps this is the last washout? I’ll let you know from under my desk in the coming days and weeks-lol” - Peter Grandich, http://moneytalks.net/peters-content.html

GATA Posts:

Finance and Liberty interviews GATA Chairman Bill Murphy

China banks boost precious metals hoard amid lease demand

TF Metals Report: Removing any doubt

The Statistics:

Activity from: 8/29/2014

Global Gold ETF Holdings

[WGC Sponsored ETF’s]

Note: Change in Total Tonnes from yesterday’s data: SPDR subtracted 0.598 tonnes.

COMEX Gold Trust (IAU) Total Tonnes in Trust: 165.45: No change from yesterday’s data.

Silver Trust (SLV) Total Tonnes in Trust: 10,311.68: No change from yesterday’s data.

The Miners:

Tanzanian Royalty’s (TRX) completed heap leach pad, Solitario’s (XPL) Environmental Assessment, Newmont’s (NEM) tentative deal in Indonesia, Yamana’s (AUY) Board appointments, and Paramount’s (PZG) drill plans 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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