HardAssetsInvestor

September 05, 2012

Gold & Silver Face Key Technical Levels Ahead Of Key ECB, Fed Decisions

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We offer our latest analysis on the precious metals market.

Precious metals rose another leg higher over the past several trading sessions after Fed Chairman Ben Bernanke’s speech in Jackson Hole, Wyo., opened the door to the announcement of more monetary stimulus at the next Federal Open Market Committee meeting.

Bernanke said he couldn’t rule out further asset purchases, suggesting that a third round of quantitative easing (QE3) may be in the cards. He added that the still-high unemployment rate in the U.S. was a “grave concern.”

In that regard, this Friday’s nonfarm payrolls report may be especially crucial in influencing the Fed’s next course of action. The expectation is that employers added 127K jobs in August, while the unemployment rate remained steady at 8.3 percent.

Even if the employment report is close to expectations, the Fed may act regardless, in an effort to bring down the unemployment rate faster.

Moreover, other economic indicators—such as those on manufacturing and construction spending released earlier this week—painted a bleak picture of the economy.

The U.S. manufacturing sector stayed in contraction territory in August for the third-straight month, according to ISM, while construction spending fell by 0.9 percent, much worse than anticipated.

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