-- Posted Tuesday, 25 May 2010 | | Source: GoldSeek.com
Asia didn’t chase prices, but held them high at $1,190 as the € dropped to new recent lows at $1.22:€1. The market feels solid and disinclined to fall. All eyes are on the Spanish government bonds auction today to see if the contagion is spreading. All other financial markets are sliding [with many precious metal equities following] Gold Bullion is now a somewhat different ball game. Gold’s Friday a.m. Fix was $1,183.50, yesterday a.m. Fix $1,189.50 and p.m. $1,187.00, this morning at $1,189.50 with London continuing to dominate the gold markets across the world. Silver rose to $17.65 after touching $18.00 briefly yesterday.
Gold - Very Short-term
The battle over which way the gold price will go next is tight and has been for the last two days. Big buyers, as we mentioned before, appear to have set buying limits [likely ‘subject to good offers being made] at around these levels. Don’t expect the gold price to run up unless these buyers lift their limits in the face of no offering. Other long-term buyers are likely to come in should bad news about the Spanish government bond auction today break up this pause of stability. Sellers do not appear to outweigh buyers right now and this gold price looks firm.
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Silver – Very Short-term
At $17.66 the silver price is still tending to weaken quickly. It’s always good to remind oneself that a tonne of gold costs over $38 million, whereas a tonne of silver cost just $566,000. But the big difference is silver is consumed, gold is reclaimed. Just bear in mind that when gold turns silver will sprint past it. At $17.6 it could feel a good ‘shunt effect’ with gold in the lead.
Gold Price Drivers
Eurozone problems are structural with little chance of any ‘quick fix’ working. After the agonizing rescue of Greece [can they repay all that debt?] Spain is moving to center stage. This is a much bigger problem facing an already jaundiced investor body and a sickly €. A country facing the mess U.S. banks did in 2007/8 is a lot more serious than a bank!
World financial markets are falling due to deleveraging, stop loss triggering, as well as caution by investors. It is more an investor problem than a market problem. Investors learned from the last ‘dip’ in the market [2007 +] and are not being caught this time, so we see selling in a rush. Just as the 2007/2009 performance of gold showed it dipping before going even higher, so investors are turning to gold early, that’s why it is holding and looking robust. When the $ fell gold rose, now the € is falling gold is rising in the € and holding in the $. It is de-coupling from currencies and rising in weak ones. The most vigorous drivers of the gold price, fear, volatility and uncertainty are rising to new levels!
Regards,
Julian D.W. Phillips – www.GoldForecaster.com
-- Posted Tuesday, 25 May 2010 | Digg This Article
| Source: GoldSeek.com
