After a monster rally in the wake of the admission by FOMC Chairman Ben Bernanke in his speech from Jackson Hole, Wyoming last Friday that there was still a place for quantitative easing in the Federal Reserve’s potential response to the deteriorating debt situation threatening to engulf both the U.S. and European banking systems, Gold (AMEX:PHYS) and Silver (AMEX:PSLV) followed up on the Tuesday after Labor Day in the U.S. with more buying albeit muted for Gold. Silver, on the other hand, pushed up through $32 per ounce to close the afternoon session on the Globex at $32.38 for the December contract.
Gold took at couple of looks at $1700 per ounce and decided that Tuesday was not the day to breach the round number resistance. After some volatility in both Asian and early European trading Gold settled the day up $3.7o over Friday’s close at $1696.05 for the December contract as well.
Equities and commodities were flat to negative for most of the day’s trading as the slew of PMI data that flowed in from around the world on Monday, where it was not a holiday, suggested that the global economy was in dire need of some central bank liquid courage. The Euro (AMEX:FXE) flirted with the $1.2625 level for a while during Asian trading but ultimately settled back near Friday’s close, essentially unchanged at $1.257.
Starting off September with even a small rally puts Gold and Silver both in a very bullish posture for the month and easily sets up a potential test of $1800 by month’s end for gold and $37.50 for Silver.
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