China continues to be the “most important player on the global Gold market,” according to Commerzbank AG. The World Gold Council predicts that China will increase its Gold holdings by 13 percent this year. What makes Gold so attractive to the Chinese market? Albert Chang, managing director at Far East, said, “We are still optimistic on China’s Gold investment demand, as investors here don’t have much choice in terms of investing their wealth.” When it comes to retirement planning, 1.3 billion Chinese citizens don’t have many other options, so they turn to Gold.

American stock futures are pointing to a higher open for Wall Street this morning, and Gold is following suit. Silver, Platinum, and Palladium are all trading mostly flat. Stock markets in the United States willmainly be influenced by the upcoming earnings season  in the near future. However, just as China is a major player in the Gold market, so it is a major player in the stock markets. Recent economic data out of China have been less-than-impressive, putting a strain on global stocks.

Carl Weinberg, founder of High Frequency Economics, said that European Union governments have “failed to stabilize every challenge they have been given so far  in the (European debt) crisis.” He said, “We are ready to throw in the towel. No one can believe that no bank (in the eurozone) will fail. … All the banks in Greece, pretty much, are insolvent. … Italy’s banks have problems, too … (and) are next to come under the gun.”

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

• Gold, $1,602.70, Up $12.10.
• Silver, $27.57, Up $0.06.

The  Gold price took a small jump Monday  once investors began to take advantage of the yellow metal’s price dip, but it remained steady in the afternoon. The Gold price spiked due to rising crude oil prices and a weaker American dollar. Daniel Smith, an analyst with Standard Chartered, said, “The main thing that says to me is when inflation is poor, it encourages China to cut rates and stimulate the economy, and I see that as good news for risk appetite. Gold carries the idea that it’s a safe haven. But in reality, when everything else moves up, when liquidity improves, it tends to lift everything at the same time.” 

Crude oil prices were on the rise with news that Norway’s oil companies are preparing to lock out striking workers over various labor disputes. This would shut down all of Norway’s oil and gas production over a period of days. Norway supplies a reported 11 percent of Europe’s oil and 25 percent of its natural gas.  This not only will affect Europe but could increase energy prices globally. The strike is unlikely to last for very long, as Europe’s fiscally stressed nations would likely bring extreme pressure on Norway to prevent higher energy prices.

Federal Reserve policymakers laid the foundation Monday for what may be the next round of quantitative easing. Top officials seem to share the same outlook on how further easing is needed to boost the American economy. San Francisco Fed President John Williams said, “My baseline forecast is basically at that point where we are really not making progress over the next year, year and a half on our goals,” he said. “In that kind of condition, I would say that  additional stimulus is needed.” He said that would best be done by purchasing housing backed securities.

At 5:05 p.m. (EDT), the APMEX Precious Metals spot prices were:

• Gold, $1,588.90, Up $8.50.
• Silver, $27.38, Up $0.39.

Gold closed down today, as disappointing nonfarm payroll numbers and falling crude oil prices have prompted fears of deflation and a flight to the American dollar. “Gold’s decline today has to do with the notion that even though the job report is very weak, the lack of conviction that there will be another economic stimulus has caused  a lot of shorter term Gold investors to sell,” said Jeffrey Sica, chief investment officer of SICA Wealth Management.

The nonfarm employment report also affected stock markets, with the S& P 500 closing down for the week on fears of slowing economic growth. “It confirms the view that the U.S. economy is slowing,” said Jack Ablin, chief investment officer of BMO Harris Private Bank. “We are creating jobs at about less than half the pace in the second quarter than we did in the first quarter, either because of influences from abroad or seasonal adjustments.”

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

• Gold, $1,585.20, Down $25.70.
• Silver, $27.14, Down $060.

Gold's price fell this morning  as a result of disappointing numbers shown in the latest United States jobs report. U.S.A. nonfarm payrolls increased 80,000 jobs in June from May’s reading of 77,000, while the nation’s unemployment rate remained at 8.2 percent. “The Precious Metals bounced strongly when the (payroll) numbers turned out to be below expectations. But after all, the data is a bit mixed: It is not bad enough to suggest the Fed will go ahead with a new round of quantitative easing,  but at the same time it is not good enough to exclude it,” said Gianclaudio Torlizzi, a consultant with T-commodity.

Jeff Savage, regional chief investment officer for Wells Fargo Private Bank, said, “What a disappointing number. This was kind of disastrous. We’re not even keeping up with demographics at this point. This is not going to be liked in the markets.” Kathy Bostjancic, director of macroeconomics analysis for The Conference Board, is just as optimistic as Savage about America’s economy getting back on track. Bostjancic said, “There is little hope of an acceleration in the pace of job growth anytime soon. These conditions are likely to persist at least through the summer and possibly longer.”

At 1:01 p.m. (EDT), the APMEX Precious Metals spot prices were:

• Gold, $1,579.70, Down $31.00.
• Silver, $27.07, Down $0.68.

Major financial policy moves from Europe and China are boosting American stock futures and Precious Metals.  Precious Metals have been choppy in early morning trading thanks to the inflationary pressures these moves are likely to have on the global economy.  The first of these moves came from the UK, where the Bank of England refreshed their quantitative easing program, and now  plans to pump another 50 billion pounds  into the English economy.  George Buckley of Deutsche Bank AG said, “It's a good decision and they need to do it because the recovery is taking so long.  This is as much as decision to offset the future downside risks from the euro area as it is to try and support the rather flagging recovery.”

The next move came from China, where the  People’s Bank of China cut its main interest rate  effective Friday.  David Morrison of GFT Global said, “The fact that China is actually cutting lending and deposit rates is a bigger deal than just reducing the reserve requirement.  But there’s a great big Chinese data dump next week, so the question is whether this is a heads-up that the data will not be as good as hoped.”  China is seen as a key region in the global economic recovery.

Finally, the European Central Bank (ECB) also cut interest rates, this time to  a record low of less than one percent.  " This outcome is probably the one that is the most acceptable to the ECB at this stage,” said Jens Sondergaard of Nomura.  Sondergaard added, “I think the big question is ‘is that a unanimous rate decision,’ or are there dissenting members that would have preferred no change?”  Stock markets are typically boosted when these types of moves are made, because it shows that the government is doing what it can to support the markets.  Gold typically increases due to its historical stability in times of financial uncertainty, responding to the inflation that these moves cause.

At 9 a.m. (EDT), the APMEX precious metals spot prices were:

• Gold – $1,604.70 – Down $18.60.
• Silver - $27.64 – Down $0.72.

The Gold price closed at its highest point in two weeks today on hopes that the European Central Bank (ECB) will announce  more stimulus  measures to buoy a floundering economy in the 17 nation euro currency union. Expectations are that any announcement of stimulus by the ECB would be followed by similar measures from other major central banks.

Christine Lagarde, managing director of the International Monetary Fund, warned of a coming crisis when the United States crosses over the  fiscal cliff looming in the next 12 months.  “Fiscal cliff” is Washington, D.C., insider terminology for the expiration of a set of large tax cuts combined with huge cuts in federal spending totaling around $4 trillion, which would take an act of Congress to prevent. Lagarde said that a failure by lawmakers to act would cause a severe contraction of the American economy, sending already tepid GDP growth to levels near zero. In the same announcement, the IMF lowered its expectation of 2013 GDP growth to 2.25 percent from 2.4 percent, even if Congress were to act to prevent the economy from falling over the fiscal cliff.

The same stimulus anticipation that has lifted Gold prices also lifted oil prices today, helped by news that the  Iranian Parliament is working on a law to block the Strait of Hormuz  to oil tankers, shutting off a large part of the world’s oil supply. Any blockade attempted by Iran would likely be interpreted as a violation of international law.

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

• Gold, $1,618.80, Up $19.60.
• Silver, $28.30, Up $0.74.

This morning, Gold and other Precious Metals are reaping the benefits of global stimulus expectations. In Europe, the European Central Bank (ECB) is expected to cut lending rates to record lows.  After negative manufacturing reports came out in the United States, there has been more speculation about monetary easing by the Federal Reserve.  “Over the last few weeks, U.S. numbers have worsened a lot, and this has brought about the probability of QE3, which is probably the most important reason for the market to believe in Gold,” Commerzbank analyst Eugen Weinberg said.

As for Europe, the news continues to be bleak.  The ECB is expecting to cut interest rates to as low as 0.75 percent.  The rate has never been lower than 1 percent in the history of the euro. “I think ECB President Mario Draghi saying that he is happy with the summit results is a strong sign that the ECB is ready to do something,” said Berenberg Bank’s Christian Schulz, who is forecasting a quarter-point cut.

Mixed signals are being sent regarding the future of the American economy. Lowered employment reports and a slowdown of manufacturing activity give reason to believe that America’s recovery has slowed to a stop. However, not all reports have been so negative.  Construction spending has risen to its highest level since December 2009.  Gary Schlossberg, chief economist at Wells Capital Management, said, “I think it’s interesting that the construction spending numbers do point to the fact that this recovery, such that it is, is being led increasingly by housing, which could provide some support to the economy later in the year.” 

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

• Gold, $1,619.20, Up $19.40.
• Silver, $28.08, Up $0.52.

Gold’s price has remained stable today following doubtful views of the European Union’s summit. Commerzbank commented on Friday’s rally for Gold when the price shot up 3.5 percent by saying the demand was “likely to have been driven mainly by speculative financial investors. In the long term, we regard the current skepticism displayed by speculators to be constructive, for most fears should meanwhile be ‘priced in,’ and being a contrarian could pay off.  Precious metals could be nearing the end of their slump.”

The outcome from the EU Summit has been found to be both positive and negative from the viewpoints of European leaders as well as economists. Mario Draghi, European Central Bank president, said, “I am actually quite pleased with the outcome of the European council. It showed the long-term commitment to the euro by all member states of the euro area.” Carl Weinberg, chief economist at High Frequency Economics, would like more details to the bold proposal. He said, “We do not see how we get an instant action plan out of last week's agreement.”

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

• Gold, $1,598.80, Down $6.90.
• Silver, $27.53, Down $0.15.

The United States Federal Reserve Bank released a memo on June 18, which calls for thereclassification of Gold  from a 50% weighting to a 100% weighting. Currently, for every $1 of Gold held by the banks or central banks, only $0.50 can be claimed as book value. By changing Gold to a 100% weighting, it would retain full value just like other financial investments. This would enhance Gold’s appeal to the banking community and possibly drive up demand.

Friday’s stock market jump was a reaction to news that European leaders are going to come up with a viable bailout plan. Although this was welcome, it is still a bailout and the European economies are still desperately struggling. American companies are affected as well, and this is expected to be seen in the upcoming earning reports. Many  American companies are issuing warnings  and they site Europe as a key factor for their disappointing numbers. Second quarter reports will show the euro debt crisis, weak European demand, decline of the euro and the impact of these factors on the overall global economy will all affect the earnings of many U.S.A. firms.

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

• Gold, $1,594.50, Down $11.20.
• Silver, $27.53, Down $0.15.

Much like American stocks,  Gold rallied strongly today, though it wasn’t enough to claim a victory on the quarter. The move upward in Gold is thanks to Europe’s plan to curb its debt crisis and expectations that it could be inflationary. Historically, any type of monetary easing or money printing has been very supportive of Gold, as is any time of economic turmoil. The news brought the euro up against the dollar, and Gold followed.

Part of the deal in Europe revolves around the European Financial Stability Facility being able to“provide support to banks directly, without going via national governments’ balance sheets,” said Jens Larson of RBC in London. Larson said, “That suggests that Spain’s public finances may eventually be freed of some of the burden associated with recapitalizing its financial system, and the statement also makes clear that a new deal for Ireland might be in the making.” However, there is still concern that this won’t be a lasting solution, or at least that this news can continue to carry a market rally.

What the American dollar will do after the coming election has surprisingly nothing to do with the outcome of the election itself.  Historically, global and domestic economies have more of an effect on currency trade than political issues. Currency trade has been a big factor in Precious Metals prices lately, with Gold and Silver moving inversely to the dollar. While Europe’s financial crisis has caused the dollar to shine just by mere comparison, that isn’t likely to continue. Axel Merk, portfolio manager of the Merk Hard Currency Fund, said, “The dollar is benefiting from the mess in the eurozone, but things are not much better here.”

At 5:07 p.m. (EDT), the APMEX Precious Metals spot prices were:

• Gold, $1,600.10, Up $48.20.
• Silver, $27.53, Up $1.18.