Waiting for the next impetus to drive gold and silver higher

As the summer slowly drags on, the consolidation in the precious metals complex continues as volatility, volume, and ranges become increasingly depressed.   Without any major impetuses to drive it higher, gold has been capped by producer sales and resting speculative offers at the psychological level of $1,600 in three of the last ten trading sessions.   Its broad range in the last two weeks has not even been $50 as many market participants are on the sidelines either for the summer or awaiting news to galvanize the markets.  While it seems like the overall risk for gold remains to the downside, keep an eye out for a potential squeeze on the euro which has accumulated a huge speculative short position over the last few months.  Such a move in the euro could give gold legs in the near term.

Unemployment claims came out slightly worse than anticipated this morning at 386k versus an expectation of 367k.  The markets seem unfazed by the figure and economic data for the rest of the day as well as tomorrow is fairly bland.  It should be a quiet close to the week as July meanders on…