It’s tough to find good news about the economy these days. Many economists say the  American economy is poised for an anemic second half of the year.  “We’ll have very slow growth,” said Joshua Shapiro, chief U.S. economist at Maria Fiorini Ramirez Inc. “The excess supply of homes will weigh on housing for quite some time. Manufacturing is starting to suffer a bit. The labor market remains pretty soggy.” According to a Bloomberg survey,  Americans are more pessimistic than any time in the past six months.  “A soft labor market and political tensions surrounding potential changes in tax policy are weighing on consumer sentiment,” said Joseph Brusuelas, a senior economist at Bloomberg LP.

In the most recent auction of Treasury Inflation Protected Securities, or TIPS, demand for the assets was so strong that  interest yields actually went negative, meaning that investors were essentiallypaying  the American government to allow them to loan the government money. The attraction to these inflation protected bonds indicates widespread speculation that the economy could experience high inflation in the near future, possibly because of stimulus action by the Federal Reserve.

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

• Gold, $1,582.20, Up $9.90.
• Silver, $27.31, Up $0.13.

Precious Metals prices are on the upswing this morning, following the euro.  The common European currency is rebounding  on news that the European Union bailout fund will be able to support troubled Spain by buying Spanish bonds. Mitsui Precious Metals analyst David Jollie said, “It seems that every time we do not have (a third round of quantitative easing) announced, Gold slips back as some of these more speculative positions are liquidated. After that disappointed selling, I think the market returns to more normal behavior, and some of these speculators will try to rebuild positions. Others, such as the official sector, are also likely buyers on price declines.”

Federal Reserve Chairman Ben Bernanke’s second day of testimony was as  uneventful as expected in the way of any announcements  regarding further quantitative easing. Strategists at Lloyds Bank said, “Barring some severe intervening event or drastic downside data prints over the coming 10 sessions, it would appear that the chances of additional monetary stimulus ... being announced in the immediate future are receding. Indeed, the time line for Fed action is becoming increasingly tight, hemmed in as it potentially is by the looming presidential election in November.”

American stock futures are on the rise this morning, despite an increase in jobless claims.  Economists expected an increase in claims to 365,000, but the actual number came in much higher at 386,000. These numbers have had less of an effect recently, said Daniel Silver of JPMorgan Chase & Co. He said, “We have to ignore claims for a few weeks because it’s just too hard to get a true signal from the numbers. Even just a small mistake in the seasonal factors can generate big changes.”

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

• Gold, $1,585.40, Up $13.00.
• Silver, $27.49, Up $0.31.

Precious Metals continue to respond to a falling euro and the conclusion of Federal Reserve Chairman Ben Bernanke’s testimony before Congress today. With no firm plan for quantitative easing established, a number of investors are scratching their heads but are hopeful for further Fed action. Metals analyst Edward Meir said, “While easing may be expected, investors are still saddled with the  uncertainty of not knowing  exactly when such an order will be given.”

Bernanke also took issue with a bill being passed through the House giving Congress the ability to review monetary policy decisions, a move that clearly would diminish the central bank’s independence. He called the proposal a  nightmare scenario. He added that the bill “is very concerning because there’s a lot of evidence that an independent central bank that makes decisions based strictly on economic considerations and not based on political pressure will deliver lower inflation and better economic results in the longer term.”

U.S. stocks climbed for a second day in a row, along with treasuries and commodities. Chief investment strategist Mark Luschini said, “Earnings have been a mixed bag so far. But given the healthy state of corporate America with cash on the balance sheets and valuations undemanding, we can weather this environment in terms of share prices. …  Looking at the markets, all I can see in them is the Bernanke bid.”

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

• Gold, $1,574.20, Down $16.80.
• Silver, $27.21 Down, $0.20.

Precious Metals prices are down overall this morning, with gold and silver hovering around one percent lower.    Markets are still reacting to yesterday’s testimony  to the U.S.A. Senate Banking Committee by Federal Reserve Chairman Ben Bernanke, who did not give a clear sign that another round of quantitative easing was likely.  David Lennox of Fat Prophets said, “The market was living in hope that he might say a little more than he did.”  The closest Bernanke came to saying anything of note on the topic was that the Fed is “looking for ways to address the weakness in the economy should more action be needed to promote a sustained recovery in the labor market.”

Though there is no official word that more easing will happen, Goldman Sachs said in a recent report that  there is a strong possibility it could happen  later this year.  Goldman Sachs economist Andrew Tilton said, “While we think that a modest easing step is a strong possibility at the August or September meeting, we suspect that a large move is more likely to come after the election or in early 2013, barring rapid further deteriorating in the already-cautions near-term Fed economic outlook.”

American stock futures are down as well this morning.  Bernanke is scheduled to continue his testimony today, though consensus is that it will draw less interest from the markets.  Housing starts rose to the  highest level since October 2008, though the news wasn’t enough to turn around the loss in stock futures.

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

• Gold – $1,571.60 – Down $19.40.
• Silver - $27.07 – Down $0.33.

• Gold, $1,584.00, Down $9.10.
• Silver, $27.36, Down $0.05.

Precious Metals prices have remained stagnant during the day. There is much speculation on what will affect the Gold price and when it may happen. Jeffrey Sica at SICA Wealth shared his view on the possibility that Federal Reserve Chairman Ben Bernanke may announce another stimulus plan. Sica said, “If he doesn’t say anything against tightening, I believe it’s going to increase the likelihood of stimulus. The Gold market is going to attach itself to that and get appreciation.” In a note, UBS said, “Macro developments and policy expectations are likely to continue driving the Gold market for the remainder of 2012, and so it’s more of the same for Gold as we have seen in recent months. Clear signs of deterioration in the global economy are needed for the market’s expectations of policy response to accelerate,  which in turn would lift Gold prices.”

The Federal Constitutional Court in Karlsruhe has set a date of Sept. 12 to decide whether Germany can legally participate with the European Stability Mechanism (ESM) proposal and the fiscal pact. The concern lies in how this wait could potentially worsen the debt crisis Europe has been undergoing the past two and a half years. “It’s not great news, as it just increases the uncertainty and effectively prevents the ESM from being where it should be,” Lloyds Bank strategist Eric Wand said. “But I think after last week, when they said they needed further time, the market kind of understood it wouldn’t happen this side of the summer break.”

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

• Gold, $1,590.20, down $3.30.
• Silver, $27.38, down $0.07.

The economic turmoil in Europe has taken its toll on the global economy, with Gold being no exception.The euro has fallen to a two year low on news that the troubled countries are no closer to resolving their issues.  Another driving factor for Gold this week will be the Federal Reserve report to the United States Senate Banking Committee. The report is crucial for economic forecasters in the United States. “Gold has been pulled and pushed on the back of expectations of further quantitative easing and remains under pressure from the stronger U.S. dollar,” wrote Suki Cooper, an analyst at Barclays Plc in New York.

At the beginning of the year, there were positive signs of an economic turnaround. The job market was getting stronger, profit margins were up, and the industrial markets had solid gains. Today, those same key factors to the economy don’t have the same appeal. The employment numbers have slowed to a crawl, retail numbers are falling, and consumer confidence is waning.  A recent survey of economists shows that fewer reported rising employment or rising sales compared with last quarter’s results.  “The survey results suggest worsening economic conditions,” said Nayantara Hensel, a business professor at National Defense University who analyzed the results for the National Association for Business Economics. “The rising sales and profit margins experienced earlier in the year may have been short lived.”

The global growth forecast as set by the International Monetary Fund (IMF) is used to gauge the economic outlook for the world. Today the IMF lowered expectations for the rest of 2012 and 2013.The main issue continues to be the economic crisis in the European Union.  “Downside risks to this weaker global outlook continue to loom large,” the IMF said its revised World Economic Outlook. “The most immediate risk is still that delayed or insufficient policy action will further escalate the euro area crisis.”

At 1 p.m. (EDT), the APMEX Precious Metals spot prices were:

• Gold, $1,591.70, Down $1.80.
• Silver, $27.35, Down $0.10.

Federal Reserve Chairman Ben Bernanke is scheduled to give his semi annual testimony before a Senate panel Tuesday and the House Financial Services Committee on Wednesday. Although investors will be keeping a close watch for any mention of a third round of quantitative easing, it is expected that Bernanke will again scold or warn politicians that the nation is  rapidly approaching a fiscal cliff, and Congress should act soon. The “cliff” describes what could happen to the American economy when tax breaks totaling as much as $720 billion expire Dec. 31, and automatic spending cuts kick in Jan. 1. It appears there is little chance Congress will act before the November elections. Bernanke could make it clear that QE3 is still on the table if the economy continues to deteriorate, but many analysts said they think he will wait until his Jackson Hole speech in August before he brings up the topic of QE3.

Big banks doing bad things  are again in the news. The Justice Department is investigating potential criminal charges against big banks and individuals for manipulating key global interest rates. LIBOR is the London interbank rate that is set by a small and select group of major banks. Barclays Bank already has been fined $450 million for fixing LIBOR. Other banks being investigated include Citigroup, JP Morgan Chase, the Royal Bank of Scotland and Deutsche Bank AG. Another question is whether regulators knew about the situation but turned a blind eye.

American retail sales fell for the third straight month in June, further eroding confidence in a fragile economic recovery. Analysts expected retail sales to rise by 0.2 percent, but data released this morning by the Commerce Department show spending slipped by 0.5 percent. This report could raise hopes the Federal Reserve will need to act sooner or later with a new round of quantitative easing.

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

• Gold, $1,590.60, down $2.90.
• Silver, $27.35, down 10.