Precious Metals prices began to drop this morning over distress that a global recession may be in our future. Also, it is rumored that China may be trying to sidestep additional easing measures. The overall impact of data showing a slower growing worldwide economy is affecting today’s market, especially commodities. “There are no clear signals from China whether there will be more stimulus,” Phil Streible, a senior commodity broker at R.J. O’Brien & Associates in Chicago said in a telephone interview. “Also,overall slowdown concern is sending all commodities, including Precious Metals, down.” 

Africa's leading Gold mining operation has been suspended  as a reported 19,500 of the 26,700 workers have gone on strike. “The current impasse is extremely unfortunate, not only for the industry and its employees, but also for future growth and development in South Africa, given the critical role that Gold mining plays in our country’s economic development,” Elize Strydom, the mines chamber’s senior executive for employer relations, said in an emailed statement. South Africa was the fifth-largest Gold producing country in 2010.

Germany’s economy is in good standing, but the nation’s willingness to assist Europe’s debtor countries is in question. George Soros, Chairman of Soros Fund Management said, “There is a real danger of the euro destroying the European Union. The way to escape it is for Germany to accept ... greater commitment to helping not only its interests but the interests of the debtor countries, and playing the role of the benevolent hegemon.” Soros suggested that Germany be the leader to support the nations in need of aid.

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

• Gold, $1,738.20, Down $21.00.
• Silver, $32.76, Down $0.91.

Whether it is the effects of the QE3 announcement wearing off or investor’s taking profits off the table, Gold and Silver prices have moved down throughout the morning. Federal Reserve Chairman  Ben Bernanke found himself defending QE3  this weekend at the International Monetary Fund (IMF) meeting in Tokyo. The international community feels that Federal Reserve actions are artificially boosting their currencies, which puts them at a disadvantage for exporting their goods and services. This dialog brings into play a recurring theme that global currencies are in a race to the bottom.

Regarding this race to the bottom, IMF Managing Director Christine Lagarde is  urging Europe to roll out a bailout. The European bailout would look much like the U.S. QE3. The European Central Bank is being urged to aggressively begin buying bonds to lower the borrowing costs of the respective nation. Such measures will pump euros into the marketplace and most likely will continue to depress the valuation of the euro. Lagarde is also requesting that Greece be given more time to get their financial house in order.

U.S. retail sales rose more than expected in September  as U.S. consumers spent more on gas and cars. The core retail sales (which do not include gas and cars) rose 0.9 percent. Analysts had expected a gain of 0.3 percent. The New York Federal Reserve’s “Empire State” report, a gauge of general business conditions, was not as positive. It rose from a minus 10.41 to a minus 6.16, but economists were expecting minus 4.55.

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

• Gold, $1,744.00, Down $15.20.
• Silver, $33.16, Down $0.51.

Gold’s price dropped today with concerns that the Federal Reserve could pull QE3 sooner than expected based on improved U.S. consumer sentiment and jobs data. " We are starting to see some improvement in the U.S. economy, so the duration of a quantitative easing plan may not be as long as what was initially anticipated.  People who buy Gold as an inflation play are starting to step out of the market,'' said Phillip Streible, at futures brokerage R.J. O'Brien. Analysts suggest investors may be on the sideline waiting until after the U.S. Presidential elections for the yellow metal to show any new positions.

Spain is currently being affected by a financial crisis in which they want no assistance with. The government was expected to ask for aid from the eurozone to bring the country out of its recession, but Spain has concerns with the financial restructuring that would soon follow if they consider a bailout. " If you are the leader of a country that has done everything that had to be done, and then the ECB(European Central Bank) works on the secondary markets for you and lowers those yields, and (yet) you are told that you have to go and ask for a (bailout) and you say, ‘OK,’ but then you’re given very strong signals that if you go, you will be told, ‘No.’ How can you reconcile those two things?" Angel Gurria, secretary general of the Organization for Economic Cooperation and Development, told CNBC on the sidelines of the International Monetary Fund’s semi-annual meetings in Tokyo.

At 5:15 p.m. (EDT), the APMEX Precious Metals spot prices were:

• Gold, $1754.90, Down $15.20.
• Silver, $33.48, Down $0.61.

Precious metals were pushed down today as  consumer sentiment reached its highest point in five years. Positive data regarding a decline in U.S. unemployment appears to have momentarily bested worries caused by recent fiscal policies - namely the Fed’s unlimited bond-buying program. The University of Michigan- Thomson Reuters gauge (which economists use to get a feel for the future course of consumer spending) reached a level of 83.1 in an early October reading. This number is just shy of the average 87 posted in the year prior to the greatest economic downturn since the Great Depression.

Though gold fell today, open-ended fiscal policies engaged in by central banks are expected to boost prices in the long run. Credit Suisse forecast an  average price of $1,840 per ounce for the year 2013. HSBC’s James Steel stated that he does not predict gold to fall below $1,750 per ounce. Historically, price pullbacks such as this have presented excellent buying opportunities for investors.

At 1:00 pm (EDT), the APMEX Precious Metals spot prices were:

• Gold, $1760.90, Down $9.20.
• Silver, $33.75, Down $0.33.

Gold has been steady over the last few months and it has some economists wondering if the yellow metal is ready to break out of its holding pattern. " Concerns about overall global economic health have kept Gold in a pretty tight trading range, but this is typical just before some type of breakout, up or down.  Right now, the weight of the evidence points toward higher prices," said Nathan Rowader, portfolio manager of the Forward Commodity Long/Short Strategy Fund. Even with recent Gold prices staying relatively flat, they are still up almost twelve percent for the year.

As the leading financial power in Europe, Germany has been pushing for debt burdened Greece to move faster in their economic recovery efforts.  However, not every country agrees with the idea of a fast recovery. " We have been arguing for some time that single-minded and draconian fiscal policies may be counterproductive and have a tendency to backfire," said Brazilian Finance Minister Guido Mantega. There have been many countries worldwide that have been critical of Germany’s lack of patience.

One of the biggest topics of conversation in the financial world is the United States and the “Fiscal Cliff.” The main point of emphasis is the tax cuts that are set to expire at the first of the new year.  If they are allowed to expire without any action, the effects could be felt worldwide. " It’s very clear that if the whole tax package moves off the table it will immediately bring the U.S. into a recession, which will have a huge negative impact on the whole world," said Zhu Min, deputy managing director of the International Monetary Fund.

At 9:00 (EDT), the APMEX Precious Metals spot prices were:

• Gold, $1772.20, Up $2.10.
• Silver, $34.02, Down $0.06.