Gold caught between debt fear and positive jobs

Silver meandered between $19.78 and $20.10 – also a wider than your run-of-the-mill trading session normally witnesses. A significant (largest in 60 days) drop in copper (more than 2.8%) obviously impacted some of the runaway enthusiasm hitherto manifest in the silver pits. At the end of the day, much as some would love to convince us of silver’s lingering monetary attributes, the white metal is largely defined by its industrial demand features. Thus, even if there might be room left for a run to $22-$23 in this fall fund frenzy, the wary eye must still be focusing on where (other than ETFs) real demand for the metal will actually come from – since the manifest and overriding preoccupation appears to be about economic contractions these days.

Platinum-group metals also gyrated within broader price orbits this morning, with platinum witnessing a near-$20 range (of from $1,547.00 to $1,568.00) and with palladium running from $516.00 to $532.00 per ounce. Should we mention that rhodium was unchanged at $2,080.00? We just did. Strikers at Northam Platinum continued to do so, while little in the way of news from the auto sector was visible in the news flows this morning, other than the obviously positive take by FoMoCo on the global car market’s growth.

The auto giant expects a 5 to 10 percent rate of expansion for the sector in 2010 – “as worldwide economic recovery takes hold.” Norway buying Greek debt and now Ford envisioning more cars sold. One can hardly stand all this optimism, eh? Not so fast; the OECD – while taking nothing away from the idea that growth is underway – said today that the process is “proving slower than projected.”

Slower by how much? Oh, by about half of the originally envisioned 3% earlier this year. Oh, and OPEC warned that it expects weakening demand for black gold due to such outlooks as that of the OECD. You would not know it from looking at oil – it was up nearly a full dollar at last check. Wacky funds, you know…

A couple of Chinese news items were on tap for players to consume this morning. The first one reported the fact that the government sped up the release of August economic data by 48 hours (to Saturday!), in what is being perceived as a prelude to an interest rate hike intended to combat inflation. The Chinese economy cooled to a growth rate of 10.3 percent last quarter but inflation may have taken a step forward, perhaps rising as high as 3.5% last month.

The second news story concerns the allegedly imminent probe of potentially illegal fund activity in the Shanghai market in rubber and soy (and possibly copper and other metals). There was speculation that illicit bank loans may have been used to play in financial derivatives. Once the rumour was dismissed, rubber prices…bounced back. However, the apprehensions surrounding the government’s crackdown on speculation in the property markets did not dissipate, and this helped keep most commodities at lower levels.

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