This week has brought us some very interesting fundamental input that's influencing precious metals prices.

This week has brought us some very interesting fundamental input that's influencing precious metals prices.

Although it should not have come as a surprise to the world financial community, there seems to have been a bit of shock and awe created by the news that Portugal's Espirito Santo Bank conglomerate was missing debt payments. An audit in May shouted the warning, but it largely went unheeded.

The summer wind came blowin' in from across the sea...
      - Summer Wind

We mentioned last week that sometimes technical forces become so strong that in essence they become part of the fundamentals.

We saw just that today in gold trading and to a narrower extent in silver.

Of course gold is trading choppy and sideways as the yellow precious metal seeks new direction.

That direction is particularly hard to come by since extracurricular talk by various Fed members has been contradictory.

Gold and silver began digesting the meaning of the 288,000 jobs added in the U.S. in June. As they say in Italy, the number is giving them agita. That means acid reflux in both a literal and figurative sense. So, among other things, we've seen a nearly $10 swing between highs, lows, and back again (only down 60 cents in afternoon trading in New York).

Some things can be anticipated fundamentally.

When ADP, a private employment data organization, reported that the U.S. created 281,000 new jobs, we could be certain that the official Department of Labor figures would be in the same neighborhood.

While there are a variety of technical factors at work in the recent movement of gold, its inability to break out beyond the year's limits is indicative of an uncertainty about inflation.

One can simplistically pin this on fears about what the Fed might or might not do concerning interest rates and about the further wind-down of QE3. Let's start with the latter first.

There is no big news to report that is driving gold and silver today.

Gold tested resistance again, which may have tipped technical movements into the fundamental side of influences, that is, a steady pressure.

A few modest concrete events this week will serve to keep a lid on gold, especially, as the weekend approaches.

The least surprising aspect about today's jump in gold prices is not the fact that investors leapt at the bargain price presented at approximately 1311. That would be relatively predictable, especially given what we've been saying about technical support.