The Metals: Gold saw just slight losses in Asia and London before it plummeted over $10 at the open of trade in New York and dropped to as low as $942.75 at about 8:30AM EST before it bounced off that low during the rest of trade, but it still ended with a loss of 1.24%. Silver fell about 2% in London and dropped to as low as $14.28 by about 9AM EST in New York before it also rebounded slightly into the close, but it still ended with a loss of 2.11%. Euro gold fell to about €669, platinum lost $14.50 to $1243.50, and copper fell slightly to about $2.77. Gold and silver equities fell nearly 3% in the first half hour of trade before they rebounded slightly midday, but they then fell back off a bit in early afternoon trade and ended with over 2% losses. The Economy: Tomorrow marks that start of the fed’s policy meeting that concludes on Wednesday. At 8:30AM EST is second quarter Productivity expected at 5.4% and Unit Labor Costs expected at -2.4%, and at 10AM is the Wholesale Inventories report for June expected at -0.9%. The Markets: Oil fell while the U.S. dollar index and treasuries rose on apprehension over retail sales and earnings reports that sent the Dow, Nasdaq, and S&P roughly 0.5% lower by the end of the day. Among the big names making news in the market today were Dish Network, Dynegy, Nortel, McDonald’s, Hormel, and Merck. The Commentary: “December Gold closed down 12.6 at 946.9. This was 2.7 up from the low and 9.1 off the high. September Silver finished down 0.313 at 14.355, 0.165 off the high and 0.08 up from the low. The gold market showed initial weakness in the early trade as a stronger Dollar and slack macro economic sentiment seemed to weigh heavily on the market. With the most recent COT positioning report showing what some traders pegged to be a lofty long position, many traders were quick to blame the slide in prices on technical position balancing. After the Dollar bounce on Friday, seeing the Greenback add to the upward bias on Monday probably prompted a wave of currency related selling in gold. With the outlook for the economy also somewhat dented by the slide in equity prices, one might even suggest that gold saw some pressure Monday from the physical or industrial side of the fundamental equation. The silver market saw initial weakness on Monday and then seemed to come under more intense selling pressure into the 7:30 am central time frame. Like the gold market, the silver market seemed to feel some pressure from weakness in the equity markets, but the main catalyst behind the widespread weakness in the precious metals markets seemed to come from the residual strength in the Dollar. With the copper market eventually failing to hold some early strength one gets the impression that even industrial or physically based selling pressure was present in the Monday silver trade.”- The Hightower Report, Futures Analysis and Forecasting

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