U.S. Econ News Shows Surprising Weaknesses

A surprisingly weaker than expected reading on U.S. retail sales yesterday again raises the question about the health of the U.S. economy and raises concern that consumers will go into hibernation if the FOMC raises rates later this year as expected. While physical demand has slowed a bit this week, the pace of buying has been impressive, but gold and its friends’ failure to rally on the retail sales data and physical demand was a surprise and disappointment. This morning finds conflicting economic data contained within the U.S. industrial production report as a sharp decrease in auto manufacturing was offset by a sharp increase in oil and gas mining. This again raises the question of the auto industry cutting back due to slowing consumer demand. On the back of the Greece and Iran news discussed in Monday‚Äôs commentary we also have a stronger USD to deal with and the combination continues to pressure our market and most commodities.

This morning finds gold and silver breaking below $1.150.00 and $15.00 as the Euro again trades below 1.10. Look for physical demand to pick up today with the lower price points, but if it does not materialize it is unlikely we will hold support in the low $1,140.00s and at $14.70. Chair Yellen is scheduled to testify before Congress shortly and her comments could certainly move the market in a hurry this morning.