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  • Gold: $1,174.05 2.20 |
  • Silver: $16.85  0.02 |
  • Platinum: $946.45  4.70 |
  • Palladium: $751.35  1.70 |
  • Rhodium: $780.00  0.00 |
Weekly Market Wrap

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Gov't Revises GDP Report as Media Miss Significance

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Announcer:

Welcome to Money Metals Exchange's weekly market wrap podcast. Helping precious metals investors during these treacherous times. Now, here's this week's market wrap with commentary and analysis from the fastest growing precious metals dealer in America, Money Metals Exchange.

Mike Gleason:

Welcome to this week's market wrap podcast, I'm Mike Gleason.

So on Thursday, the Bureau of Economic Analysis reissued its third quarter GDP estimate and now claims there was a 3.6 percent growth rate. The financial media reported the release as an upside surprise.

But digging deeper into the GDP report, we find that the growth came primarily from "an acceleration in private inventory investment, a deceleration in imports, and an acceleration in state and local government spending."

Building inventories, slowing imports, and rising government spending aren't exactly the ingredients for a robust economic recovery. An alternative measure of the size of the economy called Gross Domestic Income rose only 1.4 percent in that same report that pegged GDP at a 3.6 percent growth rate.

Perhaps the less-than-stellar realities behind the official GDP number are now sinking in with investors. Nearly all asset classes moved lower yesterday. In an unusual display of universal correlation, stocks, bonds, the dollar, and gold all fell on the day.

This has been a recurring point of frustration for gold bugs all year: On a day when the dollar and paper assets sell off – or gold-friendly news gets released – gold goes down.

Of course, cries of manipulation persist – and we can't entirely dismiss them. It is a fact that large financial institutions have been involved in manipulating various commodity and derivative markets. On Wednesday, JP Morgan Chase, Citigroup, Deutsche Bank, and three other banking giants got nailed by the European Commission with $2.3 billion total in penalties for colluding to rig benchmark Libor interest rates.

These banks exert outsized influence in the gold and silver futures markets, too. Though so far, they've managed to wiggle out of charges that they illegally manipulate precious metals prices.

On the bright side, the banks and the big commercial players on the Comex futures exchange seem to have already cashed in on the metals decline and are now positioning themselves for an upside move. That, at least, is what we can infer from the latest Commitment of Traders report.

We urge long-term holders and accumulators of bullion to remain focused on real-world physical fundamentals rather than paper ebbs, flows, and shenanigans on the futures markets. It's physical supply and demand coupled – with mass psychology – that drives the major trends. An eventual panic out of the dollar will spark an intense passion for metals as a must-own safe-haven asset class.

That will be the time to sit back and enjoy your gains. Right now, with sentiment in the dumps, the market is presenting you with an ideal time to accumulate.

This week, both gold and silver moved closer to re-testing their respective lows from June. Gold traded as low as $1,210 per ounce this week. Back in late June it saw $1,200 on a closing basis and $1,180 on an intraday basis. Silver has a little more breathing room. Its June closing low was $18.50 an ounce, with an intraday low of $18.20. Silver prices got as low $19.20 this week.

If we see prices rally from here, then a massive bullish double bottom pattern would be in place for both metals. It's also possible for one or both metals to make a marginal new low before reversing, without negating the bullish pattern. Traders refer to these as fake-out moves.

As of this Friday morning recording, gold trades at $1,234, down about 1.5% for the week. Silver is coming in at $19.65 currently, and looks to finish with a weekly loss of about 2%.

Turning to the platinum group metals, we're seeing some significant outperformance, especially in palladium. Prices for palladium are up better than 2% this week, with the metal currently trading at $740 per ounce. Its sister metal platinum trades at $1,365 and looks to finish the week flat.

And before I sign off, I'd like to tell our listeners that you are free to "steal" our copper this month. No, you don't have to come to our headquarters and rip out our plumbing... just call us and order $2,000 or more, and we'll send you 20 free ounces of copper. Place an order of $10,000 or more, and we'll double it to 40 one-ounce copper rounds. And on top of that, you'll get FREE INSURED SHIPPING on your order!

To take advantage of today's bargain precious metals prices and get your FREE COPPER and FREE SHIPPING, just call our friendly in-house experts at 1-800-800-1865 or enter our website at www.MoneyMetals.com/buy/copper. You must use that special web address to get access to free copper promotion.

Well that will do it for this week's market wrap podcast, thanks for listening. This has been Mike Gleason with Money Metals Exchange reminding you that we remain fully committed to getting you the most value for depreciating dollar... with speed, with accuracy and with top notch service. Have a great weekend everybody.

Announcer:

Thank you for joining us for this edition of the Money Metals Exchange Weekly Market Wrap. Be sure to come back next week, and don't forget to subscribe to our weekly podcast through iTunes. For answers to all of your questions, or to discretely and securely buy or sell gold or silver coins, bars, and rounds, call 1-800-800-1865. Our knowledgeable and no-pressure specialists are standing by between 7:00 a.m. and 5:30 p.m. mountain time, Monday through Friday. Visit us at www.MoneyMetals.com or call 1-800-800-1865.

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