Daily Market Report 8/1/12

GOLD

This morning, ADP Employer Services said that the US economy added 163,000 jobs in July, easily beating the forecast for a gain of 121,000 jobs. This strong economic report caused Gold traders to be less optimistic about today’s U.S. Federal Reserve Open Market Committee’s report on additional monetary stimulus. If the Fed decided to launch another round of quantitative easing, the move would polish Gold’s appeal as an inflation hedge, since rampant cash printing could ultimately drive up prices. Any announcement of additional monetary stimulus by the Fed should drive Gold above the $1,630 resistance level. However, if no announcement is made, which I believe will happen, Gold will test the $1,600 level again. At 11am PDT, Gold is trading at $1,607 per ounce, down $7 per ounce on light trading volume.

SILVER

Silver stayed below $28 all day, trading in the $27 to $27.90 range. The Silver/Gold ratio remains at 58 to 1, very attractive and a great value, but unless you are a medium to long term investor (6 months on bullion) I would suggest waiting before adding any Silver bullion. At 11am PDT, Silver is trading at $27.52, down $0.44 per ounce on light volume.