U.S. stock futures held steady while Precious Metals added to gains after this morning’s release of economic data. First quarter U.S. gross domestic product (GDP) figures were  revised downward to show a 2.4 percent growth, though expectations were for no change. Also, the weekly jobless claims report showedclaims jumped by 10,000, which was more than expected. Precious Metals prices jumped after the news, as the less than stellar economic data points toward business-as-usual for the U.S. Federal Reserve’s quantitative easing program.

The Gold price finally broke through the $1,400 per ounce level and many analysts are looking for the price to hold  to show that it has broken through the resistance point. SP Angel analyst Carole Ferguson said, “The fall in equity markets in the past few days shows that there is perhaps some concern that these had moved up too quickly at a time when you also had everyone buying the [U.S.] dollar on expectations of U.S. recovery. I think the reversal of that is what is obviously helping Gold and prices could settle not far from here if the $1,400 level is sustained, which will depend on whether investors continue to buy into risk or not.”

At 9 a.m. (EDT), the APMEX Precious Metals spot prices were:

• Gold, $1,409.50, Up $15.70.
• Silver, $22.87, Up $0.33.

U.S. and European markets are experiencing losses today as investors consider data released yesterday that hinted the U.S. Federal Reserve may look to end its monetary easing program. Consumer confidence data was released Tuesday with numbers higher than they have been in five years. Housing market numbers are also on the rise and came in stronger than expected. However, the Organization for Economic Cooperation and Development warned that  government bond yields could spike as central banks begin to retreat  from their current monetary easing.

The Gold price is up this morning, primarily on strong physical buying from China.  Lower prices in Asia are luring in physical buyers  to the point that dealers are having a difficult time meeting the increased demand. Gold is still struggling to break the $1,400 mark as outflows from exchange traded funds continue. There are predictions for future price drops due to the actions the Fed might take to reduce monetary easing.

At 9 a.m. (EDT), the APMEX Precious Metals spot prices were:

• Gold, $1,388.00, Up $7.10.
• Silver, $22.37, Up $0.09.

U.S. stock futures are on the rise as the  Gold price is down in morning trading. After equities fell late last week as it became apparent the U.S. Federal Reserve would not end quantitative easing earlier than expected, Stephen Pope of Spotlight Ideas said, “We cannot rule out aggressive buying after last week’s dip because the general tenor of the U.S. economy is steady and the start to adjust the books before May month-end begins.”

A rising U.S. dollar is also adding pressure to Gold’s price. Though physical demand for Gold is still very strong, it continues to be overshadowed by exchange-traded funds, which are recording record outflows.  A key resistance level for Gold is $1,400 per ounce. Saxo Bank senior manager Ole Hansen said, “We made several attempts at the $1,400 level but, especially the last three, have failed every time. The tug of war continues as the physical market is happy picking up Gold at these levels, but the paper market isn't — they are seeing bond yields up and inflation staying subdued. They're potentially worried that the [U.S.] dollar could have a bit of a renaissance.”

At 9 a.m. (EDT), the APMEX Precious Metals spot prices were:

• Gold, $1,383.00, Down $6.50.
• Silver, $22.38, Down $0.24.

This week brought an upward change the Gold price hasn’t seen in weeks.  Gold & Silver experienced a dip Monday morning, but quickly recovered as technical trading gained positive momentum. “As the market started to come up, it was hitting [short-seller] stops and then that old huge level of support [for Silver], that low [traders] would put all their buy stops there. Once [prices] hit that, that's when it did that parabolic move up,” RJO Futures senior commodities broker Phil Streible said. “All those shorts that got in this morning, they're all covering, and all the longs that got blown out get back in on the long side.”  Gold is also regaining confidence  as there have been considerable selloffs in both Japanese stocks and the global equity markets. Investor sentiment quickly shifted toward the safe haven asset once economic concerns began to brew in Europe and Japan. " I think the feeling on the market is at the moment -- considering how there's been almost like a one-way street for equities over the last few months -- will this just be a couple of days blip and then the buyers will return?" Ole Hansen, head of commodities strategy at Saxo Bank, said in a phone interview from Copenhagen. Gold’s negative correlation to the stock market was on display this week, as the  yellow metal is heading for its best week in the past month. Mitsubishi analyst Jonathan Butler said, “The conditions are favourable for a continued role for Gold. Those loose economic policies aren't coming to an end just yet, though there are some voices in favour of a more hawkish stance in the United States.”

ALL EYES ON THE FED

This week loomed very large in the United States, as  Chicago’s Federal Reserve President Charles Evans spoke Monday in front of Congress on the outlook of the economy.  “This series of events certainly has the potential to overshadow what is likely to be a relatively quiet start to the week for fundamental macroeconomic indicators out of the US, but the big question is precisely when we’ll see the market react to the imminent tighter monetary conditions,” GFT Markets market strategist Fawad Razaqzada said. Many believed the Fed would announce the slowdown of their easing program which could drastically change the global economic landscape. However, after U.S. Federal Reserve Chairman Ben Bernanke spoke on Wednesday it was clear that the easing will continue for now. When Bernanke speaks, the Gold market listens. Wednesday was no different when  he said it was too early to slow down the central bank’s easing program based on current economic conditions.  " The correlation of the dollar with Gold has been quite strong lately, and today's weakness in the U.S. currency after Fed officials said it may be too early to be pulling back of QE (quantitative easing) certainly helps the metal," Societe Generale analyst Robin Bhar said. While Gold enjoyed a positive week, not all financial markets can say the same. Ongoing concern surrounding the future of quantitative easing (QE) and weakness in Asian markets weigh on equities markets as  stocks continue to trade down  heading into the weekend. “Positive durable goods sales were unable to bring in any lasting support and instead may be having the opposite effect, providing more evidence for the Fed to begin tapering QE,” CMC Markets’ senior market analyst Colin Cieszynski said. This week’s markets slump could disrupt a four week winning streak for both the S& P 500 and Dow Jones Industrial Average.

At 4:45 pm (EDT), the APMEX precious metals spot prices were:

• Gold, $1387.00, Down $7.80.
• Silver, $22.45, Down $0.17.

Gold’s negative correlation to the stock market has been on display this week, as the  yellow metal is heading for its best week in the past month. Mistubishi analyst Jonathan Butler said, “The conditions are favourable for a continued role for Gold. Those loose economic policies aren't coming to an end just yet, though there are some voices in favour of a more hawkish stance in the United States.” St. Louis Federal Reserve President James Bullard said that he would need to see a rise in U.S. inflation before he voted to end the current round of quantitative easing.

Gold and Silver prices were mostly flat in early-morning trading, though turned slightly lower  after the release of the U.S. durable-goods report. Durable-goods orders rose 3.3 percent, which is greater than the expected 1.4 percent rise. Also, March’s report was revised to show a smaller decline. The durable-goods report is one of the key gauges for the U.S. economy, and one that the Federal Reserve monitors when considering monetary policy.

At 9 a.m. (EDT), the APMEX Precious Metals spot prices were:

• Gold, $1,393.90, Down $0.90.
• Silver, $22.58, Down $0.04.

Lower global stock prices and weakness in the U.S. dollar pushed Gold higher  today, continuing the metal’s recent streak of volatile price action.  Widespread selloffs, subsequent short covering and speculation surrounding the future of quantitative easing (QE) have been the main contributors to Gold’s instability.  Weighing in on today’s price hike, Commerzbank analyst Carsten Fritsch said, “It’s the combination of a weaker U.S. dollar and falling stock markets that pushes up Gold.  This is not surprising as the firmer U.S. dollar and rising stock markets pushed Gold down before.”

Reports of manufacturing contraction in China prompted a  harsh decline in stock prices  throughout Asian markets following months of evidence that industrial output has been slowing.  This news along with investor concern about QE drove U.S. stocks lower as well.  " The market is still digesting [U.S. Federal Reserve Chairman Ben] Bernanke's comments, which took everybody by surprise... but today [St. Louis Fed President James] Bullard went a little bit in the other direction saying that tightening wouldn't come that quickly and I think that is lending support," Danske Bank analyst Christin Tuxen said.  Investors, analysts and economists alike are now squarely focused on the September 17-18 Federal Open Market Committee meeting as the potential date to announce the perpetuation or tapering of monetary stimulus. 

At 5 p.m. (EDT), the APMEX Precious Metals spot prices were:

• Gold, $1,392.50, Up $22.10.
• Silver, $22.66, Up $0.08.