DMR–Gold recovers from $1248 low in European trading, awaiting producer and consumer price reports

DAILY MARKET REPORT

Gold is down $4.50 on the day at $1254 after dipping below the $1250 level for the second time since this latest break began in early June. Gold turned around sharply during European trading hours after hitting a low of $1248.  Silver is trading at $16.03 and down 7¢ on the day. Trading in both metals is irresolute and lacks clear direction – in short a typical day in the annual summer doldrums. It looks like short-sellers are looking to reverse their positions on dips at or below the $1250 level and may be a sign that the price has reached a bottom.  Too, the precious metals could simply be in a wait and see mode with producer prices out tomorrow and consumer prices Thursday.

Quote of the Day
“I’m in the inflation camp. I think it’s coming. I have thought this for a while. People have looked all over for it as if looking for a lost sock or a hairpin: Where did it go? Where is that thing? But I do believe that the central bankers who have been kind of begging for inflation will be surprised at the generosity of the inflation gods over what they will ultimately be handed.” – James Grant, Grant’s Interest Rate Observer

Chart of the Day

Chart note:  Since 1971, the year the United States went off the gold standard, freed the dollar to float against other national currencies and ushered in the fiat dollar international monetary system, gold has appreciated over 3000%. In “Essay on the Coinage of Money” (1526), Conpernicus, the famed astronomer, noted: “Although there are countless scourges which in general debilitate kingdoms, principalities, and republics, the four most important (in my judgment) are dissension, [abnormal] mortality, barren soil, and debasement of the currency. The first three are so obvious that nobody is unaware of their existence. But the fourth, which concerns money, is taken into account by few persons and only the most perspicacious. For it undermines states, not by a single attack all at once, but gradually and in a certain covert manner.” Today gold protects its owners against the nemesis of currency debasement as it has over the centuries and during the Copernicus’ times.

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