The World Gold Council (WGC) reported today that Gold demand fell to its lowest point in over two years during the second quarter. The fluctuation with Gold demand is due to key consumers such as India and China acquiring less, offsetting a notable quarter for central bank acquisitions. Marcus Grubb at WGC commented on how central banks may set a record with their increased Precious Metals holdings this year compared to last. Grubb said, “If you look to the half year, central banks have bought 254 tons against 200 tons for the half year last year.  At this rate, we'll be looking at a record central bank year, higher than last year, which was a record since 1964.”

Economists in a recent Reuters poll said they see a worsening outlook with no anticipation for Europe’s debt crisis to be contained or for a significant economic recovery. The measures being taken to save the euro are not reassuring to economists that an improved economy is on the horizon. “The biggest drag on global growth in the second half of 2012 will be from the eurozone,” said Andrew Kenningham, senior global economist at consultancy Capital Economics, in a note. “Even if the eurozone manages to survive in its current form, the ongoing austerity and high credit spreads suggest the growth outlook is bleak.”

At 5:01 p.m. (EDT), the APMEX Precious Metals spot prices were:

• Gold, $1,615.90, Up $10.80.
• Silver, $28.26, Up $0.34.

Precious Metals prices recovered slightly after  two economic reports were released this morning. United States housing starts and jobless claims were worse than expected. Economists expected housing starts to rise slightly, but they fell by 1.1 percent. Economists also expected a rise of about 1,000 in new jobless claims, but the real result was slightly higher at 2,000. These reports could give the Federal Reserve more ground for another round of quantitative easing (QE), about which some are expecting a decision later this month.

Physical demand for Gold is taking a hit in India now.  That country has been the world’s largest consumer of Gold, in large part due to its high demand for use in jewelry. The two factors that are playing into the softening demand are an increase in import duties and a weak Indian rupee, which drives the local price of Gold higher. Combined with a stronger dollar and weaker euro, the rest of the world is seeing the Gold price hover around $1,600 per ounce. With currency trade on one end and the desire for a safe haven investment on the other, Gold seems to be tugged by both sides at the moment, waiting for a potential announcement on QE from either the United States Federal Reserve or the European Central Bank.

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

• Gold, $1,608.30, Up $3.20.
• Silver, $27.97, Up $0.05.

The Gold price experienced little movement today, staying just above $1,600 per ounce for most of the day. The yellow metal was heavily talked about once it was reported that longtime gold bull John Paulson has confidence that the Precious Metal is a long term currency and inflation hedge.  This reassured investors that Gold’s price can rise  regardless of its performance the past two quarters.

The American economy is showing improvement. Data about retail sales, unemployment and the trade deficit all reflecting stronger numbers. Based on these numbers, Jan Hatzius at Goldman Sachs predicted that if the Federal Reserve pushes further stimulus measures like quantitative easing (QE3), it will not be in September. In a note to clients, Hatzius wrote, “We believe that continued weakness is necessary to prompt a substantial easing move. And so far, that weakness is not showing up in the data.” Many economists are under the impression that Federal Reserve Chairman Ben Bernanke will indicate the central bank’s next move at the Fed’s summer meeting in Jackson Hole, Wyo., on Aug. 31. 

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

• Gold, $1,603.90, Up $2.90.
• Silver, $27.89, Up $0.02.

Gold closed down Tuesday as investors scaled back expectations of action by the Federal Reserve. “Better economic figures may make the Fed postpone or do away with additional stimulus,” said George Gero, vice president of RBC Capital Markets.  Gold also appears still trapped around $1,600, and many investors are disappointed the metal has yet to strongly break above $1,625. Platinum showed the effects of supply concerns and the possibility of an uptick in auto sales by moving higher.

It appears that the unrest in Syria might be coming to a bloody close. “The regime is collapsing, spiritually and financially, as it escalates militarily,” former Prime Minister Riyad Hijab said. “It no longer controls more than 30 percent of Syrian territory.” While most of the major towns and cities along the main highway have seen violence, difficult media access make it hard to determine government or rebel control.

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

• Gold, $1,599.60, Down $11.50.
• Silver, $27.85, Down $0.03.

The morning news is optimistic for the economy based on renewed growth figures from Europe. The see-saw effect of Europe’s ups and downs are reversing yesterdays drop and once again going up. Tuesday data is showing gross domestic product output for the region in line with expectations Germany had modest growth while France had a flat performance.

Closer to home news is also positive as a report is out today showing that retail sales rose 0.8 percent last month. Economists had only expected a 0.3 percent rise. The report also tells us that the seasonally adjusted Producer Price Index is up 0.3 percent last month, higher by 0.1 percent than expected. Despite the higher prices, there was an increase in consumer spending during July. The core measure of retail sales which excludes autos, gasoline, and building materials rose a solid 0.9 percent.

One of the top consumers of gold in the world, India, is showing weak demand for the precious metal as prices for gold remain strong against their currency, the rupee. India’s festival season has begun and will peak in November. This is a time for weddings and giving gold as a gift.

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

• Gold, $1,597.70, Down $13.50.
• Silver, $27.75, Down $0.13.

The Gold price fell slightly Monday, as investors took earnings after last week’s gains. “Everybody seems to be waiting for this huge money printing that they think is going to happen, which hasn’t happened yet. So, nobody really wants to bet against it, but at the same time they don’t want to go long,” said Doug Roberts, chief investment strategist at Channel Capital Research.

As the European debt crisis continues, it is evident that Europe’s foundation is ultimately taking care of the peripheral countries that have more or less had to be bailed out by the troika of the European Central Bank, International Monetary Fund and European Commission.  The concerns are beginning to rise as the growth numbers for France and Germany are slipping. Also, for May and June, Germany’s factory orders fell by a disturbing 1.7 percent compared to the 0.8 percent forecast. Gerard Lyons, chief economist at Standard Chartered, told CNBC.com, “In the good times, the euro encourages money to go from the core to the periphery, creating booms and busts. In the bad times, it encourages money to go the other way, and increases the liabilities of the core. The euro is a fundamentally flawed concept, and that’s why the core is facing greater challenges. The core can’t cut themselves off completely from the periphery, and that’s what markets are responding to.”

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

• Gold, $1,610.60, Down $10.70.
• Silver, $27.87, Down $0.31.

Precious Metals and equity markets were flat this morning as  concerns about global growth  continue to provide headwinds. Japan’s economy only grew by 1.4 percent, when it was projected to grow at 2.5 percent. Markets were down initially but have recovered on new hopes for further  intervention by central banks  around the globe.

France, the United States and Mexico (which holds the G20 presidency) will hold a conference call at the end of August to discuss whether an emergency international meeting should be called regarding soaring grain prices. The worst U.S. drought in 50 years is causing  grain prices to rise to unprecedented heights. Benchmark Chicago corn has climbed to all time heights, which could send food prices soaring, as well. This committee will seek to avoid a repeat of the food price crisis of 2008.

Google plans to cut 4,000 jobs  from its recently acquired Motorola division. This represents about 20 percent of the Motorola staff. About 65 percent of these cuts will come from outside the United States. Google will close about 30 of Motorola Mobility’s 90 facilities, as it seeks to simplify the wireless product offerings.

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

• Gold, $1,620.50, Down $0.80.
• Silver, $28.06, Down $0.11.

The euro rebounded in afternoon trading today, which helped Gold, Silver, and many stocks to rebound from early losses, as well.  China is now firmly in the mix as one of the global problems, said Sandy Lincoln of BMO Asset Management U.S. “It’s Europe, China, and the U.S. as the three big worries,” Lincoln said. How central banks react in this trying time is key to whether the global economy essentially makes it through to the other side. Miller Tabak’s Peter Boockvar said, “We’ve been talking about the tug of war for a while of the slowing global economy on the one hand, and central bankers trying to fight it tooth and nail on the other hand.”

Recent data from China, as mentioned previously,  may be the jolt that central banks needed to spur them into more action for the economy. Jeffrey Sica of SICA Wealth Management said, “Gold is up mainly because of the weak manufacturing numbers in China, suggesting that there is a pretty strong indication we are going to see more quantitative easing there.” One potential setback to more easing is rising food prices, however. Sica believes that the Federal Reserve will be more concerned with keeping inflation in tow due to these rising prices.

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

• Gold, $1,621.00, Up $2.30.
• Silver, $28.19, Down $0.02.

Import prices in the United States  fell unexpectedly in July, extending the streak to four months of declines. The decline in import prices could be one more reason for the Federal Reserve to ease monetary policy further. Historically, tools such as quantitative easing have been very supportive of Precious Metals prices.

The possibility of further easing is one of the reasons  Gold investors are the most bullish in five weeks, according to Bloomberg news service. Among the factors supportive of the Gold price are disappointing economic figures out of China and Europe. Colin O’Shea of Hermes Investment Management Ltd said, “More quantitative easing will certainly be beneficial to commodities (like Gold). Do you need more QE to drive the market higher? Probably not. The demand side of the equation has been pretty robust.”

The strongest economy in the eurozone, belonging to Germany,  is inching closer to a recession. Joerg Kraemer, chief economist at Commerzbank, said, “The German economy is losing momentum -- there’s no doubt about that -- and in the third quarter the economy will shrink compared to the second quarter. Things will go downhill from here. The German economy is not faring as badly as the rest of the eurozone, but it can’t disconnect itself, especially as growth in China has slowed and continues to do so.”

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

• Gold, $1,616.90, Down $1.80.
• Silver, $27.85, Down $0.36.

Precious Metals across the board remained flat through the day. A belief that further stimulus measures will be pushed out by central banks is providing the substance Gold needs now. Charles Nedoss at Kingsview Financial said, “Continued hopes of more quantitative easing in key economies and  fears of inflation have supported Gold. Markets still expect help from central banks is going to materialize sooner or later, and prices for commodities such as oil and grains have crept up, feeding fears of inflation.”

Crude oil is steady as the United States economy and dollar has regained strength. Addison Armstrong at Tradition Energy said, “The dollar is stronger, and that’s likely to keep a lid on prices.” Jason Schenker at Prestige Economics LLC said, “The positive U.S. economic data is having an impact on crude. These are positive growth signals. The trade number is a sign that second quarter GDP will be revised higher.”

The second largest bank in Germany,  Commerzbank, issued a bleak outlook today  after it stated the possibility it may not pay a dividend in 2013. Commerzbank received an 18 billion euro bailout as the Lehman Brothers collapse occurred along with the financial crisis. Most recently the bank has suffered through a sluggish economic recovery with a debt crisis infecting most of Europe. “The greatest downside risk remains an uncertainty shock from an escalation of the sovereign debt crisis -- i.e. the collapse of the monetary union,” Commerzbank said in its quarterly report, adding it thought that risk was higher now than in autumn last year.

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

• Gold, $1,618.20, Up $3.70.
• Silver, $28.19, Unchanged.

American stock futures and Precious Metals rebounded this morning after two economic reports were released. The trade deficit  narrowed to the smallest gap in nearly two years, and weekly jobless claims fell  after economists expected an increase. The four week moving average of the jobless claims, however, increased slightly. Recently, good news for the American economy has worked the opposite way with Precious Metals, as good news makes the Federal Reserve less likely to institute another round of quantitative easing.

Economist David Rosenberg said the  U.S. economy is not growing as quickly as it should. He said, “The overall story is that with the massive intervention by the U.S. government and the Federal Reserve, they did manage to terminate the Great Recession in the mid part of 2009, but the reality is that we never had much of a recovery, at least in the economy. And in terms of what we’re seeing going forward, I still think that there’s more downside risk than upside potential.”

The Gold price was steady this morning, though losses in the euro seemed to be trying to pull it down. Societe Generale analyst Robin Bhar said, “Gold seems to have gotten a foothold above the $1,600 level  and seems to be relatively stable. It’s still showing this correlation to riskier assets. We’ve seen a bit of a rally in the oil market and equities, and Gold has kept a par with those moves.”  Bhar said he believes more stimulus from federal governments is needed to spur the Gold price higher at this point.

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

• Gold, $1,613.40, Down $0.60.
• Silver, $28.09, Down $0.10.