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    JM Bullion Weekly Market Review (8/12/16)

    Market Overview: Gold prices are seeing some moderate selling pressure in very early trade today as higher equities and stronger risk appetite weigh on the yellow metal. Increasing expectations for a December rate hike from the Fed are not doing gold any favors either. With light summer trading volumes, gold appears to be drifting lower as equities continue their ascent into fresh all-time highs.

    Key Data Points: This week has been on the lighter side from a data perspective, and today will be no exception. Investors will, however, get the latest readings on Retail Sales, PPI, Consumer Sentiment and more.

    Retail Sales are expected to see a slight decline to .4 percent from a previous reading of .6 percent.

    Consumer Sentiment is expected to register a higher reading, with consensus estimates looking for 91.5 The Producer price Index is expected to come in flat, following a previous reading of .5 percent.

    Outside Markets: Yesterday, the S&P 500, the Dow Jones Industrial Average and the Nasdaq all made fresh all-time highs together for the first time since 1999. In what some might describe as a weird market, the path of least resistance still appears to be higher. The fact that there is still money on the sidelines may reinforce this notion, and as more and more of that sidelined capital finds its way into equities there could still potentially be significant gains ahead.

    Crude oil saw a decent bounce yesterday as a Saudi oil minister alluded to the possibility of some type of action being taken next month to stabilize oil prices. The market remains well-supplied, but some analysts believe that no action will be taken in what could amount to a repeat of the Doha meeting in April. The recent rise in crude may be supportive for equities, however, the oil market could put a damper on equity buying if prices begin to slide again. A break below the $40 per barrel level would likely garner investors’ attention.

    The dollar index remains in its recent range as investors await more clues from the Fed about the timing of the next rate hike. Some recent economic data has been on the stronger side of expectations, and that has driven up expectations of a December rate hike.

    The Big Picture: Gold has seen some relatively tight price action recently, and could be gearing up for a sizable move in either direction. Gold has held up very well despite fresh all-time highs in stocks and further talk of another rate hike this year. Perhaps the next hike will be a sell-the-rumor-buy-the-fact type of situation in which investors scoop up even more gold in spite of a rate hike.

    On the other hand, if stocks start to show signs of a top, gold and silver could potentially see significantly larger inflows as investors look for alternative assets to put capital to work in.

    Disclaimer: All Market Updates are provided as a third party analysis and do not necessarily reflect the explicit views of JM Bullion Inc. and should not be construed as financial advice.

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