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Morning Snapshotby Peter A. Grant
Oct 04, AM 
Gold remains well bid and has established a new high for the year at 1794.35, but important resistance at 1802.89 (08-Nov-11 high) has yet to be truly threatened. Yet, as Reuters reported this morning, "the supportive low interest rate environment and backdrop of further monetary stimulus made further price gains inevitable."Inevitable indeed. We've pointed out many times in recent years that negative real interest rates and currency debasement due to expansive monetary policies are very supportive to gold. As evidenced by recent central bank actions, these are trends that are unlikely to turn around any time soon. Both the ECB and BoE held steady on rates today. That Reuters article went on to quote Simon Weeks, director of precious metal sales at ScotiaMocatta, "The question is of when rather than if we break out." I'm inclined to agree with Mr. Weeks. A weak nonfarm payrolls print tomorrow may prove to be the catalyst for a breakout, as it would up expectations that the Fed will have to do more than buy mortgage backed securities. There is already growing speculation that the Fed will resume buying Treasurys before year-end. • US factory orders -5.2% in Aug, well below market expectations of -1.6%, vs negative revised +2.6% in Jul; inventories +0.6%. • US initial jobless claims +4k to 367k for the week ended 29-Sep, below expectations of 370k, vs upward revised 363k in previous week. • ECB holds refi rate steady at 0.75%, in line with expectations. • BoE holds base rate steady at 0.5%, asset purchase target unchanged at £375 bln, in line with expectations. • Russia CPI rises to 6.6% y/y in Sep, vs 5.9% y/y in Aug. • Australia retail trade +0.2% in Aug, vs -0.8% in Jul. • Hong Kong retail sales value +4.5% y/y in Aug, vs upward revised 3.9% y/y in Jul; volume +3.2% y/y. Peter Grant is USAGOLD's resident economist and a well-known analyst globally in the forex and precious metals markets. NEWSLETTER SIGN-UP Opinions expressed in commentary on the USAGOLD.com website do not constitute an offer to buy or sell, or the solicitation of an offer to buy or sell any precious metals product, nor should they be viewed in any way as investment advice or advice to buy, sell or hold. USAGOLD, Inc. recommends the purchase of physical precious metals for asset preservation purposes, not speculation. Utilization of these opinions for speculative purposes is neither suggested nor advised. Commentary is strictly for educational purposes, and as such USAGOLD does not warrant or guarantee the accuracy, timeliness or completeness of the information found here.
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Thursday October 4
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