-- Posted Monday, 24 May 2010 | | Source: GoldSeek.com
Friday saw the market find support, making Asian demand pay up for their gold. Remember, it is a global market where developed world events don’t rule. Asia took the gold price back up to $1,190 before London opened on Asian long-term investment demand. Gold’s Friday a.m. Fix was $1,183.50, today $1,183.75 with London continuing to dominate the gold markets across the world. Silver rose to $17.86 before New York opened.
Gold - Very Short-term
Mainly Chinese demand started the week in this 24-hour market, after good institutional, long-term support came in late Friday in the States, to turn the market to the upside after taking the offer of good volumes. Traders saw this and began to close 'shorts' ahead of this month's close of positions and rolling over of Options and Futures positions to the next month. While COMEX is only a cash market, major players have to enter the physical gold market to change gold and silver prices. This was a ‘tidal’ [trend] influence exerting itself over the market.
At this time, of the month big New York banking players press the price down to squeeze the ‘roll-over’ traders, but with major central banks and long-term investment demand coming in to take the gold on offer late on Friday, support interfered with this process. Hence the daily 'wave' action could see a mixture of both influences again. However, the market tone is robust.
[Gold Forecaster & Silver Forecaster newsletters will feature; “Gold – A Means of Exchange? - A Measure of Value?” and “Does defending a currency or a government bond really work?” and “Will European Central Banks resort to selling gold again?”[Subscribe through www.GoldForecaster.com] Some of these appear beyond the newsletter but key ones won’t!
Who are we?
We are a newsletter with a 95% correct record on the Gold & Silver Prices. We aim to help Subscribers not just the ‘what happened’ of the market, but the ‘Why it happened’, a must read set of reports and newsletter. We favor Gold itself and growth gold mining shares. We are www.GoldForecaster.com and www.SilverForecaster.com
Silver – Very Short-term
Silver has started the week on a firmer note after last weeks battering. It stands at $17.83, being led up by the gold price. Underlying strong fundamentals are not overriding the influence of the gold price, so keep your eyes on the gold price to gauge the direction of the silver price. Repeat: - Silver will continue to rise faster and fall further than gold, in the days ahead.
Gold Price Drivers
Asia is seeing a huge surge in the size of their middle classes and the accompanying jump in disposable income. This process is far bigger than the West has factored in and promises that these ‘new rich’ will save a considerable portion of their new wealth. In both countries [China & India] new wealth has favored gold as an investment. This is providing constantly growing, enormous support for gold and to a lesser extent silver. It will persist as long as growth in these countries does.
Traditionally we have entered the last week of the Indian gold buying festival/marriage season before the traditional agricultural sectors planting season/monsoon gets underway, then Indian buying from this sector departs the market until mid late August. They used to account for 70% of India's demand, but with the rise of the Middle class this seasonality is leaving the market and has only been seen in one of the last eight years. Indian demand is therefore becoming less seasonal and more investment oriented. So a drop in the price last week gave that market the 'floor' price they like to go in on. These are the reasons why the gold price jumped so much over the weekend.
Regards,
Julian D.W. Phillips – www.GoldForecaster.com
-- Posted Monday, 24 May 2010 | Digg This Article
| Source: GoldSeek.com
