-- Posted Tuesday, 13 July 2010 | | Source: GoldSeek.com
Asia began the day taking the gold price up $5, then London added $1.50 to Fix at $1,206.50. With the $ weakening slightly in many currencies, but not enough to influence gold New York was thought to start relatively slowly. But not so! Gold started to move with some vigor and took the gold price up $10 quickly. The battle of the Technical picture versus the fundamentals continues. Three of the five London Bullion Banks were sellers of gold this morning. We believe we are at the middle point of gold’s current trading range at $1,216.
Gold - Very Short-term
Technically, gold is continuing to consolidate, but today is set to go higher. With Portugal being downgraded by Western rating Agencies, we are reminded that the Sovereign debt crisis is far from over, so underpinning the price. For more precise forecasts on a weekly basis subscribe through www.SilverForecaster.com or www.GoldForecaster.com].
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Silver – Very Short-term
Still riveted to gold the silver price has risen to $18.26 today in pursuit of gold. Silver remains the poor man’s gold but not with the same global appeal as gold. Silver will continue to follow gold.
Gold Price Drivers
Today, the financial world received a sharp reminder that it is still in the middle of the Sovereign debt crisis and will stay there until it is resolved worldwide. Portugal has been downgraded yet again, to AA-. It is likely now that Spain is to be downgraded too.
To get this in perspective, it is refreshing that we see the Chinese opinion of the developed world’s credit rating. The Dagong Global Credit Co does not think Fitch’s and other western agencies are correct in giving an AAA rating to the U.S., Britain, Germany and France. They add weight to “wealth creating capacity” and foreign reserves. The U.S. is rated at AA, Britain and France down to AA-. Belgium, Spain, Italy fall to A- the same as Malaysia. China with an 8% growth rate and $2.4 trillion reserves is now at AA+ alongside Germany, the Netherlands and Canada. Why is this important to gold, you may well ask?
As the I.M.F. tells us, China’s time has come. This will mean as we have and are seeing, vast wealth is being drawn into China from the West as manufacturing seeps into China. As the trend continues the West will see itself becoming vulnerable to growing financial pressures reflecting the move of wealth and power, eastward. The transfer of wealth and the crises coming out of the process highlights the relevance of gold as a wealth preserver, in changing times.
Perhaps the Dagong Global Credit Co. view of the world’s nation’s bottom line is completely relevant in the world of today?
Regards,
Julian D.W. Phillips
-- Posted Tuesday, 13 July 2010 | Digg This Article
| Source: GoldSeek.com
