As War Talk Eases So Does Gold & Silver

Gold retreated in the Asian session following cues from late US trading. Gold is down $9.50 this morning trading at 1409.30. Gold prices were trading higher amid a rise in investment demand as holdings in SPDR Gold Trust increased to 921.03 tonnes from 920.13 tons yesterday. However, a stronger dollar weighed on losses and capped the upside. Meanwhile, markets await US GDP data due today for further cues on the Fed’s asset purchase program. With holiday thinned trading as the US begins its Labor Day Weekend holiday and Europeans end their summer vacation season volume is expected to be thinned and will remain sensitive to the geopolitical situation and less in tune to the GDP numbers. Traders a trying to decide if a US or UN air strike against Syria is imminent and will this take place before the FOMC meeting in September. The US Dollar resumed its safe-haven status role on Wednesday vs the US Dollar after investors sought safety in the liquid greenback amid growing expectations that the U.S. is poised to launch military strikes against Syria for the latter’s alleged use of chemical weapons. The greenback is trading at 81.44 flat in morning trading. The dollar held near a four-week high against a basket of its peers before U.S. data forecast to show the economy grew faster than initially estimated, adding to the case for the Federal Reserve to slow monetary stimulus.

Late yesterday a UN resolution was unable to pass due to the objections of Russia, as expected. Global equity markets have been hit hard in recent days as fears of a U.S.-led military intervention in the country in the country heightened after allegations the government of Bashar al-Assad used chemical weapons against opposition rebels. U.S. Secretary of State John Kerry said late Monday that there could be little doubt about the use of chemical weapons by forces loyal to the Syrian government, calling the action “inexcusable.” It looks imminent that a US-UK attack is in the making. At the same time Assad claims if attacked he would retaliate against Israel.

Copper futures edged lower on Wednesday, as escalating geopolitical tensions between the U.S. and Syria continued to weigh on appetite for riskier assets. On the Comex division of the New York Mercantile Exchange, copper futures for December delivery traded at USD3.326 a pound during European morning trade, down 0.3%. Copper is trading at 3.305 down 13 pips this morning. China’s government has tried to reassure companies and its public about the economy’s health, saying growth is stabilizing after a lengthy decline and should hit the official target of 7.5 per cent for the year. The announcement by the chief spokesman for the Cabinet’s statistics agency was part of official efforts to defuse unease about the country’s deepest slump since the 2008 global crisis. “There are growing signs of stabilization and also of further growth,” said the spokesman, Sheng Laiyun, at a news briefing. “We are confident we can hit our full-year growth target.” according to Business Spectator. Silver eased off its highs close to the $25 price level to trade in the red this morning at 24.193 falling close to 80 cents in just two days.