15-Sep (USAGOLD) — Gold has dipped back below the $1800 level on fresh reassurances from France and Germany that Greece will get the next tranche of bailout funds. For good measure, the ECB announced coordinated central bank dollar liquidity measures in an effort to quell the mounting liquidity crisis that has sprung from the European sovereign debt crisis.

The euro has rebounded to regain the 1.39 handle and European banking shares have gotten some relief on the news that the ECB, Fed, SNB, BoE and BoJ will all be pumping dollars into the system in three separate operations on 12-Oct, 09-Nov, and 07-Dec. The anticipated flood of dollars has heightened risk appetite once again, and while weighing on gold initially, the relentless expansion of ‘paper’ liquidity is a primary long-term driver of gold price appreciation relative to that paper.

• US Philly Fed index rose to -17.5 in Sep, below market expectations of -15.0, vs -30.7 in Aug.
• US industrial production +0.2% in Aug, in-line with expectations; cap use 77.4%.
• ECB will offer 3-mth dollar liquidity operations in conjunction with Fed, SNB, BoE, BoJ.
• US CPI +0.4% in Aug, above market expectations of +0.2%, vs +0.5% in Jul. Core +0.2%, in-line with expectations.
• US current account gap narrowed to -$118.0 bln in Q2, on top of market expectations, vs -$119.5 bln in Q1.
• US NY Empire State Index sank to -8.82 in Sep, well below market expectations of -2.3, vs -7.7 in Aug.
• US initial jobless claims surged 11k to 428k in week ended 10-Sep, well above market expectations of 412k. Prev week revised higher to 417k.
• SNB reaffirms it will buy unlimited amounts of currency to defend EUR-CHF peg, citing deflation risks; sees inflation at just 0.4% this year.
• SNB holds steady on monetary policy. 3-month Libor target rate 0.00%.
• UK retail sales -0.2% in Aug, above expectations, vs +0.2% in Jul; unch y/y.
• Eurozone CPI +0.2% in Aug, in-line with expectations, vs -0.6% in Jul; +2.5% y/y. Core 1.2% y/y.
• Singapore retail sales (nominal) 10.7% y/y in Jul, vs 10.9% in Jun.
• RBNZ holds steady on official cash rate at 2.50%, in-line with expectations.