-- Posted Thursday, 27 May 2010 | | Source: GoldSeek.com
Each day this week the London Fix has increasingly dominated the gold price. It is trading at the same level as this morning’s fix, still. This has moved the emphasis from currency relationship to a more comprehensive reflection of the state of the world’s financial systems. Silver is creeping up from $18.00 to $18.33 in pursuit of a closer relationship with the gold price.
Gold - Very Short-term
If the dominance of major institutional investors were not so large we would have seen a greater jump than we have seen in the last day. But this market is about acquiring gold in quantity, not raising prices. Until the wanted quantity dries up, prices should move around this level, base building again.
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Silver – Very Short-term
Silver is more stable today, at the moment. It’s holding above $18.00 at $18.32. This portends more stability in today’s market. But as with gold, should there be more bad news coming from the Eurozone or any other worrying area, things could change and quickly.
Gold Price Drivers
Essentially the gold price drivers are the same as yesterday and earlier this week. A major impact of all these is the sensitization of investors. As they become less certain of prices in all other markets, they become more skittish’ and easily sell. This adds to volatility, which in itself undermines remaining confidence.
The Spanish Parliament passed the austerity measures today by one vote, so not really convincingly. Doubts persist that the Spanish have the heart to carry these measures through. The € has not really gained support from this as the € remains at the $1.2250 region. The major fear is that the nations in financial distress may not give wholehearted support in the long-term, so undermining the repayment of any rescue measures from ‘brother’ nations in the E.U. and from the I.M.F. You can be sure that the markets won’t wait to be convinced, but will discount lackluster efforts rapidly, spawning new extreme crises.
History gives us a similar situation to today in the 1930’s. But events move much faster these days because of the revolutions in communication and information, so what took from 1929 to 1939 will happen in half or even a quarter of the time. It looks like we are around 1932/33?
Regards,
Julian D.W. Phillips – www.GoldForecaster.com
-- Posted Thursday, 27 May 2010 | Digg This Article
| Source: GoldSeek.com
