Dull day for bullions

Prices drop from their recent highs

Bullion metals ended lower at Comex on Wednesday, 04 September 2013. Gold futures dropped under $1,400 an ounce on Wednesday to settle at their lowest in nearly two weeks, as the market kept watch on developments surrounding Syria and silver dipped more than 4% to lead the broad losses among metals prices. The geopolitical tensions in the market place eased just a bit on Wednesday, which also helped to limit any new safe-haven demand for gold.

Gold for December delivery fell $22, or 1.6%, to settle at $1,390 an ounce.

December silver fell $1.01, or 4.2%, to end at $23.42 an ounce.

The afternoon release of the U.S. Federal Reserve's beige book detailed a U.S. economy that is growing modestly to moderately, depending on the sector. This news was not unexpected nor much different from recent Fed reports and comments from Fed officials, and thus was not markets-moving. Major world economic data is just around the corner. The important U.S. jobs report is out on Friday. The Bank Japan, Bank of England and European Central Bank hold their monthly monetary policy meetings on Thursday. There is also a Group of 20 nations meeting this week.

Today's economic data was limited to the July trade deficit, which widened to $39.1 billion from an upwardly revised $34.5 billion in June (from -$34.2 billion). The consensus expected the deficit to come in at $38.2 billion. The widening in the deficit resulted from imports increasing $3.5 billion versus June and exports decreasing $1.1 billion. The drop in exports was paced by a $1.6 billion decline in exports of capital goods, excluding automotive, and a $1.36 billion decline in exports of consumer goods, the bulk of which stemmed from a pullback in exports of jewelry, gem diamonds, and artwork, antiques and stamps.

Conversely, imports increased on the back of a near $2.0 billion jump in imports of industrial supplies and materials, a $0.8 billion increase in imports of automotive vehicles, and a $0.7 billion increase in consumer goods, most of which stemmed from imports of artwork, antiques and stamps. The widening in the trade deficit is going to factor negatively in GDP models for the third quarter.

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