-- Posted Monday, 31 May 2010 | | Source: GoldSeek.com
"With a holiday today in the States and U.K. many will be assessing the near future of the market, particularly the €’ future. With Spain being downgraded on Friday, the gold price held strong at $1,214, at the same level as the p.m. Fix in London. While the media says that opinions are divided on the future of the globe’s monetary system, prudence points the way to invest.”
Gold - Very Short-term
Don’t expect any moves today with holidays in the world’s main financial centers. Asia came in just below the p.m. London gold Fix at $1.214 in the middle, marking time until markets open again. What we find most disturbing is the use of the media by government financial officials to express their confidence in all the moves made by European governments when far more than talk is needed now. Structural reform is not on the agenda, which is why there is room for considerable doubt still. This is why prudent investors have been turning to gold, particularly the leading underdeveloped world’s central banks and fund investors. This is likely to be the tone for the next week now. Institutional limit buying is still dominant in the gold market, giving an apparent stability to the gold price.
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Silver – Very Short-term
Silver is likely to show a narrowing in its trading range swings, as it steadies under the influence of a steadying gold price. At the moment, in a quiet Asian market, it is standing at $18.50 waiting for gold’s lead. The key to the unleashing of the silver price and its departure from the slipstream of gold will be the termination of Russia’s ‘official’ selling of its stockpile of silver. Only Russia knows when that will be.
Gold Price Drivers
With Spain being downgraded and worrying the ability of Europe to overcome its structural financial woes, gold is being driven by the prudent investor, from major institutions to the perspicacious small investor. No amount of official ‘spin’ will convince this market that the E.U. has a firm grip of this problem. The preponderance of such ‘spin’ is, in itself, worrying. For confidence to return, solid reform demands deep savings by government for a long time to turn their balance sheets around. This is not politically acceptable. An easier way out is inflation, something not here yet, but can be seen on the far horizon. Cheapening money may not work long-term, but it may be used to get the world out of a hole, or so they may think?
The U.S. and its $ has been ignored while Europe has been in the spotlight and appears to be the lesser of the two evils at present. Few believe this is any more than a temporary situation. Quo vadis – where do we go to now?
Regards,
Julian D.W. Phillips – www.GoldForecaster.com
-- Posted Monday, 31 May 2010 | Digg This Article
| Source: GoldSeek.com
