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Gold Closes the Gapby Peter A. Grant
Oct 18, AM Better than expected US leading indicators and significant jump in the Philly Fed index suggest a brighter economic picture here in America as well. However, there was a marked jump in initial jobless claims last week, which erased the distorted drop from the previous week...and then some... With the fiscal cliff looming, President Obama is reportedly prepared to play hardball with Congressional Republicans, perhaps at the risk of yet another downgrade to US sovereign debt. Scott Mather of Pimco says, “The U.S. will get downgraded, it’s a question of when.” The euro has retreated modestly as EU leaders begin a two-day summit in Brussels, amid doubts that they are any closer to resolving the eurozone crisis. The Bank of Spain reported today that the ratio of bad loans held by Spanish banks has climbed for a 17th consecutive month, reaching a record 10.5% of total lending. The market continues to eagerly await the Rajoy governments official request for a bailout, while continuing to wonder what he's waiting for. Additionally, nearly half of the workers in Greece are expected to go on strike and bring that troubled economy to a complete standstill. Workers are increasingly upset over the governments ongoing efforts to cut spending to meet the requirements for their bailouts. "Just once, the government ought to reject the troika's absurd demands," Yannis Panagopoulos, head of the striking GSEE private sector union, told Reuters. Naturally, there would be repercussions for such a rejection. • US leading indicators +0.6% in Sep, above expectations of +0.2%, vs negative revised -0.4% in Aug. • US Philly Fed index jumped to 5.7 in Oct, well above expectations of 0.0 vs -1.9 in Sep. • US initial jobless claims +46k to 388k for the week ended 13-Oct, vs upward revised 342k in the previous week. • UK retail sales +0.6% m/m in Sep, above expectations of +0.5%, vs positive revised -0.1% in Aug; +2.5% y/y. • China Q3 GDP dips to 7.4% y/y, vs 7.6% y/y in Q2. • China industrial output +9.2% y/y in Sep, vs +8.9% y/y in Aug; cumulative +10.0% y/y. • China retail sales +14.2% y/y in Sep, vs +13.2% y/y in Aug. • China fixed investment (cumulative) +20.5% y/y in Sep, vs +20.2% y/y in Aug. • Hong Kong unemployment rate (sa) ticks higher to 3.3% in Sep, vs 3.2% in Aug. 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 18
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