-- Posted Monday, 28 June 2010 | | Source: GoldSeek.com
"Friday saw gold strengthen virulently in the face of strong downward pressure. What is disturbing was that the gold market concluded that the meeting was not going to deliver what it should have done ahead of the start of the meetings! Consequently the p.m. Fix was set at $1,254. The a.m. Fix in London today was set at $1,256 in the morning. In fact the results of the G-8 were unconvincing and we believe the markets will reflect this. It was an opportunity to stave off global financial stress that was not taken…The accommodation of other interests diluted the few results that were achieved. This was gold-positive!
Silver flowed gold up to cross the $19 hurdle at last and stood at $19.06 before New York’s opening.”
Gold - Very Short-term
Gold is not moving from Friday’s and today’s Gold Fix level of $1,254 and today’s $1,256 ahead of New York. Attention has been firmly on the G-8 meeting over the weekend. We don feel that today will also be positive for gold and silver again for technical resistance was knocked out of the way. With talk of a drop in growth coming, the double-dip recession is moving towards center stage. The future is darkening again.
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Silver – Very Short-term
Silver did well to cross the $19.00 level and should continue to keep close to gold on the rise. Some more work may well be needed in this market. It still needs to taste long-term investment into the Silver Trust first, though.
We will be addressing the issue of “Is Silver de-coupling from gold” shortly, in the Silver Forecaster newsletter.
Gold Price Drivers
The G-8 meeting was a disappointment, like most of the times before. However, this time it needed to be a success in tackling a global approach to Sovereign debt, bank regulation and growth. It was described as papering over the cracks only. The I.M.F. warned that without coordination of policies to tackle the key global financial problems, trillions of U.S. Dollars could be lost alongside millions of jobs. No such coordination came forward instead the divisions on how to tackle the problems remain. In stronger economic times this may be bearable, but should growth shrink, such divisions will tip the developed world economies into a far worse time than is coming soon. Where from?
“Mr Bernanke and his close allies at the board in Washington are worried by signs that the US recovery is running out of steam. The ECRI leading indicator published by the Economic Cycle Research Institute has collapsed to a 45-week low of -5.7 in the most precipitous slide for half a century. Such a reading typically portends contraction within three months or so.” Ouch – but gold positive!
Regards,
Julian D.W. Phillips
-- Posted Monday, 28 June 2010 | Digg This Article
| Source: GoldSeek.com
