-- Posted Friday, 4 June 2010 | | Source: GoldSeek.com
"The morning Fix in London was $1,203.5 with gold moving up at New York’s opening at $1,205. The p.m. Fix will dictate the day’s play thereafter. Silver is lower than its $17.76 Fix in London at $17.6. Little news came out to add to the scene today.”
Gold - Very Short-term
Yesterday afternoon, gold took a knock from the higher end of its current trading range to closer to the bottom of that range. There is room for it to fall further, below $1,200 before it hits big support. But the investors driving the gold price now will go with the flow as they seek good volumes of gold. They won’t chase prices just move them to get that volume, where possible. As Friday is the most mobile of the week’s days for the gold price, New York should see direction given, but after the p.m. Fix has given the first guiding light.
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Silver – Very Short-term
Silver took a dive down to $17.6, still above support at $17.50, but demonstrating that this metal is a fine place for traders to be. We see nothing alarming in this move and see it climbing from this level in New York, simply because the fall was overdone. Repeat: -The report in our latest Silver Forecaster on the situation in silver and our forecasts will give you direction for the long-term. [Subscribe through www.SilverForecaster.com]
Gold Price Drivers
With the G-20 meeting, it seems hopes are raised that more will be done to restructure the banking/credit worlds that were/are the source of failing confidence in the system. At present they appear to be shutting the door after the horse has bolted. The strategy is to ensure banks don’t fail as they did in 2007 +, still. Europe relies more on bank financing than the U.S. [more reliant on Capital Markets], so Europe’s banks will have their financing sources drained more by these requirements.
But glance across at the present Sovereign Debt crisis and we see the similar problem morphed into government credit crisis, with banks sitting ducks for the first government to fall. Even France is dumping its Greek bonds with the ECB, much to Germany’s annoyance. It’s like ‘musical chairs’, the one who can’t find a seat when the music stops is knocked out, then one more chair is taken away and the music starts again….
Should one, just one, of the European banks ‘fail to find a chair’ the ensuing panic could devastate what remains of the confidence in the €. Central banks too are slowly lowering their exposure to the €, so what will raised capital requirements do to solve this situation in the face of a government default? Bank loan syndications are not necessarily wise, dragging all down together? The solution eventually will be to print more money still? Please note, that in the Weimar Republic [the hyperinflationary time for Germany [1919 – 1923]], money had to be printed to fill the huge holes caused by failing institutions, just to keep the economy going as money velocity stalled.
As to yesterday’s fall in the gold price, the move was a normal wave-like move in the price, within support and resistance, although it has postponed any breakout either way. The trend of the market has not altered.
Regards,
Julian D.W. Phillips – www.GoldForecaster.com
-- Posted Friday, 4 June 2010 | Digg This Article
| Source: GoldSeek.com
