The gold market certainly came alive in the wake of another wave of soft economic data from the US yesterday with the escalation of slowing fears prompting press coverage predictions of recession. In retrospect two US data points this week have shown precipitous declines, European data has fallen off dramatically, the Dow fell 838 points in a sign of investor anxiety and it now appears as if some form of a trade war has started between the EU and the US.

Given the disturbing economic data flows globally the focus of the market today will be heightened into the US ISM nonmanufacturing reading but also on jobs related data as the nonfarm payroll report on Friday could be a major inflection point on the question of recession/no recession.

Fortunately for the bull camp gold ETF holdings increased for the 13th straight day with silver holdings expanding for the sixth straight session.

It is possible that gold prices have been held back this week by ideas that Chinese trade/purchasing of gold is being disrupted due to the national party celebration and it is also possible that predictions of a significant drop in Indian September gold imports has discouraged some safe haven buying from the economic uncertainty theme.

In another potential positive the trade is starting to see calls for 3rd straight rate cut from the Fed in the wake of the turn down in data chains.

In the end, notably soft data, ongoing impeachment efforts, the Chinese stalemate and fears of rising US/EU trade tensions might have resulted in a breaking point for the US economy and that should leave gold and silver bulls in a favorable position going forward.

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