The Daily Nugget: The Wait Continues

So everyone is still hanging onto gold, waiting for The Speech on Friday, not buying much more but not selling either. This morning it is "trapped" in a tight range and remains just slightly below Monday’s high of $1676.45.

Bloomberg data shows that exchange-traded product holdings expanded by 0.1 % to a record 2,460.46 metric tons. This "exceeds Italy’s 2,451.8 tons and ETPs constitute the third- largest hoard compared with national reserves."

This is a sentiment which is reflected in other markets, Reuters report that "shares eased and major currencies remain range bound" as investors wait to see if there will be further stimulus announcements. It seems every day we are just waiting to ask the central bankers how high they would like us to jump.

Yesterday the "will he, won’t he?" debate as to whether Bernanke will announce further stimulus tomorrow continued. The Fed announced that its Beige Book survey showed the economy had grown "gradually" in July and early August. The world’s largest economy reportedly grew by 1.7% in the second quarter, slightly more than the 1.5% expected. Economists and the mainstream are super excited by that 0.2%, hoping it means the economy will no longer need that extra stimulus.

The gold price may fall back slightly today given the lowered expectations of further QE. For many however, buying below $1700 is a bargain which won’t be hanging around for long. Stimulus is likely to be coming given the FOMC’s statement earlier this month that stimulus would go ahead unless the economy showed strong progress.

Yesterday was also a day when the eurozone wasn’t looking quite as united as they might want us to think. The day started with Mario Draghi writing an op-ed piece for Die Zeit that it is in Germany’s interests to consent to extraordinary steps to save the currency union. More like it’s in the technocrat’s interests, the German’s have seen economic decisions punish them before, it will be interesting to see how quietly they take this.

Draghi is hoping to appeal to the German public, after Weidmann’s comments, ahead of both the ECB’s 6th September meeting which will decide whether to buy Spanish or Italian bonds on the market in order to bring down their borrowing costs in order to prevent the debt crisis from spreading and the decision on the 12th September by Germany’s supreme on the constitutional standing of the proposed euro rescue fund.

Meanwhile Merkel and Monti clashed over the possibility of the ESM receiving banking licence, with Merkel very sensibly arguing that current treaties forbid the ESM receiving bond-buying powers. France’s Prime Minister, Jean-Marc Ayrault supported the German Chancellor.

The eurozone might be the one dominating the headlines at present with inflation in Germany climbing, Greece unable to sort out its cuts package and Italian sales falling but focus will soon be divided between here and the US.