In the precious metals markets this week . . .by info@monex.com

GOLD:
Monex spot gold prices opened the week at $1,817 . . . traded as high as $1,879 on Friday and as low as $1,782 on Monday . . . and the Monex AM settlement price on Friday was $1,875, up $58 for the week.  Gold support is now anticipated at $1,865, then $1,841, and then $1,812 . . . with resistance anticipated at $1,880, then $1,892, and then $1,911.

SILVER:
Monex spot silver prices opened the week at $41.12 . . . traded as high as $43.16 on Friday and as low as $40.45 on Monday . . . and the Monex AM settlement price on Friday was $43.09, up $1.97 for the week.  Silver support is now anticipated at $42.45, then $41.45, and then $40.08 . . . and resistance anticipated at $43.19, then $44.00, and then $44.62.

PLATINUM:
Monex spot platinum prices opened the week at $1,838 . . . traded as high as $1,884 on  Friday and as low as $1,822 on Monday . . . and the Monex AM settlement price on Friday was $1,880, up $42 for the week.  Platinum support is now anticipated at $1,861, then $1,842, and then $1,686 . . . and resistance anticipated at $1,905, then $1,912, and then $1,950.

PALLADIUM:
Monex spot palladium prices opened the week at $759 . . . traded as high as $788 on Thursday and Friday and as low as $753 on Monday . . . and the Monex AM settlement price on Friday was $775, up $16 for the week.  Palladium support is now anticipated at $772, then $765, and then $754 . . . and resistance anticipated at $778, then $784, and then $795.


QUOTES OF THE WEEK:

From Richard Russell, editor of Dow Theory Letters, in remarks posted on his website on August 29th:

''Whenever there are problems in any area, I always look for the fundamentals.  Looking over the entire picture, I can pin the fundamentals of today's troubles on the creation of fiat money.  When in 1971 President Nixon refused to pay off US debt in gold, he told our creditors that we would pay them with 'dollars' (actually Federal Reserve Notes) instead of gold.  Foolishly, our craven creditors accepted our Fed-created money in lieu of gold (wasn't the dollar as good as gold?).  In a matter of months, the world switched from the gold standard to fiat irredeemable money.

The beauty of the US's coup is that the US and certain other central banks can now print as much of the new irredeemable money as they want.  With a single act, gold was rudely ejected from the system.

After reading this weekend's literature, I had to wonder whether gold was heading down to around a price of zero. 'I am now on record that gold has topped out and is headed for a major decline' writes friend Joseph Granville in his latest mailing.

'The price of gold could fall a third from its recent high' warns Gene Epstein in the current issue of Barron's.

'Gold's brief Reign' is the heading and warning from Murray Coleman in this week's Barron's.

How seriously should we take all this concentrated anti-gold talk?  My own reaction is that these forecasters don't know any more about the death of gold than does my Aunt Tilly.  Sure, it's an interesting and reasonable bet.  Gold is in its eleventh year of an historic bull market, and gold has yet to be subject to a major killer correction.  If you haven't been in gold during this whole bull market, you probably hate gold and its performance and hope it goes to zero.  Omaha Oracle Warren Buffett despises gold but adores stocks at this time.  So why not bet against the yellow metal?  If you're right, you're a brilliant analyst, if you're wrong your predictions will soon be forgotten.''

. . . and from Daniel Indiviglio, in an article posted on The Atlantic website on August 30th:

''What recovery?  That must have been the question stuck in the minds of most Americans as consumer confidence fell dramatically this month, to its lowest level since March 2009.  It was the biggest one-month drop since October 2008 -- when the financial crisis hit its climax.  This disastrous result should have economists and policymakers sweating.  Without the American consumer on board, the economic recovery doesn't stand a chance.''

''In August, the [Conference Board's Consumer Confidence Index] plummeted 14.7 points to 44.5.  You can see pretty clearly from the chart that confidence has rarely dipped below 50 since mid-2009.  Certainly, in a recovery it should be much higher.  This level of sentiment is what you would expect to see as the economy is shrinking -- not expanding.

Most of the reason why sentiment fell so drastically stems from expectations weakening.  Although consumers said their present situation was slightly worse in August than in July, they had a much more pessimistic view of the future, according to the Conference Board.

The research firm points to the U.S. government as the main reason for poor sentiment.  Its director of research Lynn Franco says that much of the pessimism stems from the debt ceiling debacle and subsequent sovereign debt rating downgrade by Standard and Poor's.

You could probably add a few other factors to this list, however.  Stock market volatility certainly isn't helping to calm consumers.  The federal government entered a period of austerity and the Federal Reserve shook its head at additional stimulus this month, which might leave Americans feeling like the government isn't going to do anything else to try to remedy the severe unemployment problem.  We also learned that the first half of 2011's growth was extremely weak at just 0.67%.  Finally, consumers who thought rising prices -- largely blamed for the summer slowdown -- were finally declining probably weren't thrilled to see inflation resume in July.

This very weak level of sentiment implies that we may see spending decline this month. That's particularly disappointing since it rose rather strongly in July, after falling in the prior three months.  If consumers pull back in a meaningful, prolonged fashion, then a double dip will probably be unavoidable.  Consumer spending makes up a huge chunk of GDP.  It also serves as the single most important factor that could cut the unemployment rate.  Firms aren't hiring because the demand they're seeing is weak enough that their current employees produce enough already.''

. . . and from David Malpass, in an editorial on the ''Opinion'' page of The Wall Street Journal on August 31st:

''The Fed takes the view that gold prices have limited meaning and that low bond yields are desirable as stimulus, not a market-based indicator of slow growth and high risks to the financial system.  This leaves the financial world in suspense over whether the Fed will buy back more of the national debt or even new types of assets as some are urging.  The uncertainty is great for the Fed-watching community and Wall Street, which profits by buying bonds in advance of Fed purchases.  But the suspense hurts growth and jobs.

To break this cycle, the Fed needs to rebuild a monetary system in which the dollar is a strong and stable store of value and capital is allocated based on interest rates and market forces rather than the rationing of regulatory capital.  Gold prices would be lower and bond yields higher in anticipation of a growing economy and a safer financial system.

Unless the Fed breaks the cycle, many of the arguments for buying gold and bonds still pertain.  The Fed owes $2.8 trillion in liabilities, undercutting confidence in the dollar and the financial system.  It is willing to promise zero interest rates for years but not willing to criticize the declining value of the dollar, one of the most important metrics of central banking.''

. . . and from Benjamin Powell, in an editorial on the ''Issues & Insights'' page of Investor's Business Daily, on September 2nd:

''The problem is: Government doesn't create jobs that add value to the economy; companies and entrepreneurs do.  Through taxes, mandates and regulation the government typically discourages hiring and destroys jobs.  What Washington should do right now is step aside.''

''If the politicians would put America's fiscal house in order -- by reducing the size and scope of government -- they would encourage entrepreneurs to create the kinds of jobs that add value to the economy and, in what economists call a 'virtuous cycle,' help generate additional hiring.

Another White House jobs initiative is exactly the wrong remedy.  With some 14 million or more Americans unemployed, the best jobs program from Washington is none at all.''

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