Daily Market Report 8/30/12

GOLD

The price of Gold is in the middle of the recent $1,640 to $1,680 trading range. Tomorrow we will know what Federal Reserve Chairman Ben Bernanke will say in his Jackson Hole, Wyoming news conference. If he announces a new stimulus package (QE3), Gold should break out above the $1,680 per ounce level, perhaps breaking through the $1,700 resistance level. If Bernanke disappoints the market and doesn’t announce a QE3 type program, Gold should test the $1,640 level. At 11am PDT, Gold is trading at $1,659 per ounce, down $2 on light volume.

The U.S. economy fared slightly better than initially thought in the second quarter, but the pace of growth remained too slow to eliminate the possibility of further monetary easing from the Federal Reserve. The Commerce Department reported on Wednesday that the gross domestic product expanded at only a 1.7% annual rate. While that was an improvement on the government’s first estimate of 1.5% published last month, it is insufficient to cut the unemployment rate that increased to 8.3% in July.

SILVER

Silver is continuing to consolidate above the 200 day moving average of $30.30 per ounce. Any QE3 program should affect the value of Silver at a larger percentage than Gold. Silver is trading at $30.47 per ounce, down $0.37 per ounce on light volume.