The Daily Market Report: Gold Remains Defensive Within the Range

01-May (USAGOLD) — Gold remains defensive within the well defined range, dropping to a 6-week low. Traders seem to be just jobbing that range; buying at the low end and selling near the highs with no real commitment one way or the other.

The gains in gold recorded earlier in the week after the dismal Q1 GDP print have been taken back in the wake of the much better than expected initial jobless claims number that came out yesterday. The drop in claims to a cycle-low 262k raises the possibility of a favorable surprise when April nonfarm payrolls comes out next Friday.

Fed rate hike expectations continue to vacillate based on the most recent data points. However, the latest FOMC policy statement suggests the central bank is in no hurry to raise rates. They remain patient, even though “patience” was removed from the statement with much fanfare back in March.

In light of the weak March jobs data and the terrible Q1 GDP number, I don’t think a June hike is in the cards. Although the FOMC didn’t explicitly rule out a June hike this week, it remains unlikely even if April jobs data surprises on the upside.

Another deadline for a Greek deal has come and gone. Greece was supposed to provide a specific list of reforms it is prepared to implement by the end of April. Talk out of Europe is that they hope to have a deal hashed out by Sunday. We’ll see . . .

The important thing to remember is that another €7 bln in bailout funds isn’t going to save Greece from itself; it only buys them a little more time. If a deal is worked out and the next tranche is released, creditors are simply loaning Greece more money that they will immediately give back to the creditors to pay down the previous loans that have come due. It’s all quite silly.