-- Posted Tuesday, 22 June 2010 | | Source: GoldSeek.com
"Thin trading always leads to a strong move and this one was healthy, taking gold down to $1,232 before recovering in Asia to $1,237 before London opened. At the moment it stands at $1,234. One of the causes was the recovery of the $, or should that be a weakening €? Either way these were traders still following the €: gold link, despite its failure to follow reason. But this type of market reaction is waning. With the Friday a.m. Fix at an all time high of $1,259.50. But then it was time for a breather, as the first Fix today showed at $1,235.25 showed. It was late Friday in New York that the big drop came, just before the close. With the gold price back in the $1,230 area buyers are happier to pay these prices. They are hoping to see larger quantities of gold reach the market at these levels.
Silver pulled back from its high at $19.42 to $18.75.”
Gold - Very Short-term
Today will be a consolidation day for gold, after tasting new record highs. None of the fundamentals have changed. However, a fear of buyers is that they are paying record prices, so 
are they going to lose quickly, if they buy. Sellers likewise are tempted at these levels, but maybe prices will rise? But this market is not speculative. Large buyers continue to dominate, but their sights are set on buying sufficient gold, not on the price. If standing back rattles the cages of sellers and they then provide the quantities of gold these buyers want, then that’s the way they will play the price. Hence today will see a consolidation and an increase in volumes of gold traded. One way of gauging volumes moved is the time it takes to Fix the gold price.
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Silver – Very Short-term
Silver pulled back with gold to the high $18.00 levels and is expected to consolidate today too.
We will be addressing the issue of “Is Silver de-coupling from gold” shortly, in the Silver Forecaster newsletter.
Gold Price Drivers
The rise in the Yuan on its first day was less than hoped and has now dropped back. This is as we thought. The main short-term driver of the gold price at the moment is the pull back of large buyers, taking the steam out of the gold price rise. In pulling back, sellers are hopefully more willing to sell. This will improve two-way trade and give a more solid basis to the market. Of course, if sellers don’t appear, buyers will have to lift their limits again. Let’s see what happens this week?
At the moment the € is weakening against the $ but the $ is weakening against the Yuan, the Yen and other currencies. The situation remains bullish for gold further out than the short term. Sterling, ahead of their austerity measure announcements is also weakening. The currency world is not a happy one today. Gold is well supported at these and lower levels.
Regards,
Julian D.W. Phillips
-- Posted Tuesday, 22 June 2010 | Digg This Article
| Source: GoldSeek.com
