As active members of the Federal Open Market Committee shared their thoughts about the American economy and Gold demand decreased in India, the yellow metal took a step back in price this week. India has imported 90 tons less in April than it had the same time last year. The number of jobs that were created by American employers was less than expected. Frank McGhee at Integrated Brokerage Services, LLC, voiced his opinion. McGhee said, “The market is clearly worried. The physical demand has also been very weak.”

Standard & Poor’s rating agency has decided to upgrade  Greece's long-term credit rating  from selective default to sub-investment grade triple-C today, based on the success the eurozone nation experienced with its dreadful bond swap. “The CCC rating on Greece reflects our view of the recent reduction in government debt following the restructuring, the reduction in debt servicing costs as a result of the exchange, and the increased average maturity of the central government debt stock,” S& P wrote in a release.

At 5:19 p.m. (EDT), the APMEX precious metals spot prices were:

• Gold - $1654.70 - Down $8.70 
• Silver - $30.67 - Down $0.29 

Precious metals have remained relatively steady in overnight trading. Stock markets are down on less-than-stellar jobs data. A popular topic among investors is the steadiness that precious metals prices have had over the past few days and weeks. One metals strategist said, “Gold will probably be  sitting in limbo  for a few more days. … It is rather inversely sensitive to positive numbers, as evidenced by the ISM number overnight.” A metals dealer in Hong Kong said, “Investors are standing on the sidelines of the market, waiting for the uncertainty around the U.S. economy, eurozone and QE3 (third round of quantitative easing by the Fed) to clear up.”

China is clearly upset  about the United States’ handling of a Chinese dissident, having allowed him to stay in the American Embassy for at least six days. How this plays out during meetings over the next couple of days is anyone’s guess. While Secretary of State Hillary Clinton said, “I am pleased that we were able to facilitate Chen Guangcheng’s stay and departure from the U.S. Embassy in a way that reflected his choices and our values.” But the Chinese government was quite angry, saying, “The U.S. method was interference in Chinese domestic affairs, and this is totally unacceptable to China. China demands that the United States apologize over this, thoroughly investigate this incident, punish those who are responsible, and give assurances that such incidents will not recur.”

Most economists had expected 170,000 new jobs would be reported for April, but according to ADP data released this morning,  only 119,000 jobs actually were added. Many economists said the warmer winter affected job additions during the last few months. Economic adviser Joel Prakken said, “There is some evidence that unusually warm weather boosted employment during the winter months, with a ‘payback’ now coming due.”

At 9 a.m. (EDT), the APMEX precious metals spot prices were:

• Gold - $1,655.30 – Down $8.10.
• Silver - $30.56 – Down $0.38.

Precious metals prices have remained steady in afternoon trading, as the majority of world markets are closed in observance of May Day. United States manufacturing data released today is still a plus in the eyes of investors stock markets were up, but metals remained relatively flat.  Year to date, the Gold price is up 6 percent  after the Federal Reserve in January said that interest rates would remain near zero until 2014 to encourage economic development.

Pimco Chief Executive Mohamed El-Erian said, “The U.S. economy is on the right path  but it’s not moving fast enough.” El-Erian said he thinks the Federal Reserve should not implement another round of quantitative easing at this time.

Two Federal Reserve officials advised that America could be heading toward a fiscal cliff by the end of the year if mandated tax increases and spending cuts are implemented. Atlanta Fed President Dennis Lockhart said there could be a “financial shock” if markets begin to anticipate that lawmakers in Washington will not address the situation.  The goal here is to build a stronger foundation for America  to be able to control the budget deficit.

At 5:26 p.m. (EDT), the APMEX precious metals spot prices were:

• Gold - $1,663.60– Down $1.60.
• Silver - $30.97 – Down $0.06.

Precious metals prices remained relatively stable through morning trading. The dollar rallied on better-than-expected manufacturing data. The inverse relationship between the dollar and Gold continues. The better results dampen any expectations of further quantitative easing measures in the near term, which stabilizes Gold prices. HSBC analyst James Steel said, “The bullion markets have been on the defensive since U.S. Federal Reserve Chairman Ben Bernanke began distancing the Fed from a third round of quantitative easing in testimony to Congress on 29 February.” Other analysts said that Gold really just “needs another catalyst” besides quantitative easing.

Meanwhile, a blind Chinese dissident has holed himself up in the United States Embassy in China ahead of a rather important meeting between the United States and China in Beijing to discuss human rights, foreign trade and other topics. The Chinese dissident, Chen Guangcheng, escaped from house arrest and wants to stay in China. The talks this week  are likely to cover China’s role  in foreign relations, including any involvement in the nuclear programs in Iran and North Korea, the Syrian situation, and some other territorial issues. Secretary of State Hillary Clinton said she is not shy about pressing the issue of human rights. In a news conference, she said, “A constructive relationship includes talking very frankly about those areas where we do not agree, including human rights.” In regards to Chen, the prevailing thought is that he might have to leave China.

Manufacturing index numbers beat initial estimates in a report this morning, climbing to 54.8 percent for the month of April. This exceeded even the most optimistic estimates. Manufacturing “continues to be a bright spot in the recovery,” said Ellen Zentner, a senior U.S. economist at Nomura Securities International Inc. in New York. “We have yet to see a drop-off in foreign demand for U.S. manufactured goods, and that comes despite all the concerns of a slowdown in the global economy.”

At 12:53 p.m. (EDT), the APMEX precious metals spot prices were:

• Gold - $1,664.80 – Down $0.40.
• Silver - $31.17 – Up $0.15.

Gold’s price recovered from early losses today as the focus in the eurozone debt crisis shifted to Spain. The financial circumstances surrounding Europe and the United States are looking optimistic for the Gold price, analysts said. “Investors will continue to seek refuge in its safe-haven status. Standard and Poor's cut the top-notch credit rating for the U.S. The debt crisis appears aggravated in Europe. We are not doing very well in India. Given the uncertainties about the fate of the global economy and closer at home,  the yellow metal will continue to soar to new heights,” one analyst said.

News of Spain’s monetary crisis ultimately pushed the euro down and strengthened the American dollar this morning. With last week’s credit downgrade of two notches to BBB+ with a negative outlook for Spain’s credit rating by Standard & Poor’s, along with rising borrowing costs for the economy, it is no wonder why this is happening so quickly. Carl Weinberg at High Frequency Economics had some interesting advice for the country in order to prevent another Greece ordeal. Weinberg said, “The time to restructure Spain’s debt burden is now, before the market declines to fund its cash needs, and before billions are squandered unfixing its finances.”

Economist and author  Robert Shiller said he believes the United States is in a state of “late Great Depression”  as consumer confidence shows a shortage of trust in the economy. “Our whole economy has been affected by variations in confidence. Central banks are sort of trusted, but the actions they have often affect people’s confidence by appearance rather than substance. We’re not in the most trusting mood now,” Shiller said.

At 5 p.m. (EDT), the APMEX precious metals spot prices were:

• Gold - $1,666.60 - Up $0.80.
• Silver - $31.07 - Down $0.36.

The Gold price stayed mostly steady for the first half of Monday. The price lowered this morning based on the strength of the American dollar. Later in the morning, information was released that softened Gold’s price drop.  With less growth in the United States and a higher expectation for quantitative easing, Gold has been able to remain steady. “Gold’s ability to hold above $1,620 an ounce this month, despite several tests of that level, is cheering investors that the longer-term bull trend is intact,” analysts said.

The financial issues in Europe have been well-documented. Germany has yet to follow the pack toward instability.  Germany’s sales, employment, and overall economic growth have bucked the trend of European failures.  Bob Parker, a senior adviser for Credit Suisse, said, “What we’re now seeing is a modest improvement in retail spending, and with the low  unemployment,  the German economy should grow at a minimum of 0.7 percent — I’m assuming spending will slowly improve.”

American consumer spending reports are worse than expected. Higher gasoline prices and lack of consumer confidence are major factors in the disappointing numbers. Surveys show small-business hiring slowed in April, which adds to the pressures on the consumer market.  However, on a bright side, the manufacturing reports have shown improvements.  “Personal spending rose 0.2 percent in March, in the 12 months through March the PCE index was up 2.1 percent, the lowest in a year but still just above the U.S. Federal Reserve's target of 2 percent,” the Commerce Department said.

At 1:07 p.m. (EDT), the APMEX precious metals spot prices were:

• Gold - $1,664.80 - Down $1.00
• Silver - $31.03 - Down $0.39

Stock futures are unchanged, while the precious metals markets turned sharply lower in the last hour. The news that the  Spanish economy is officially in a recession  certainly puts a damper on the markets. Austerity programs and spending cuts make it unclear when the economy might ever begin to turn around. Spain is the euro zone’s 4^th  largest economy and it is under pressure to reduce its public debt. This is having a negative effect on the euro, this boosting the USA dollar.

Another key element to keep an eye on a potentially testy trip to Beijing this week by Secretary of State Hillary Clinton and Treasury Secretary Timothy Geithner revolving around trade talks and global issues. What makes things testy are the human rights issues that have been prevalent and issues involving China’s allies Iran and North Korea. The other underlying factor is the upcoming elections in the U.S. and change in leadership in China. Kenneth Lieberthal said, “It is feasible that this will become a very big deal with  major negative impact on U.S.-China relations, but it is also feasible and far preferable that this be able to be negotiated quickly and quietly.”

The outlook of gold is still tied in quite heavily to pro quantitative easing sentiment. According to LGT Capital’s Bayram Dancer, “We had the GDP data from the United States, which (fuelled) higher hopes of quantitative easing. Analysts have really decreased (their expectations for QE), but I feel if the conditions are right, we can still see some sort of quantitative easing.” However, the fact that  gold has remained over $1,620  an ounce is making investors pretty happy.

At 9:05 a.m. (EDT) – the APMEX precious metals spot prices were:

• Gold - $1,653.50 – Down $12.30.
• Silver - $30.82 – Down $0.61.