-- Posted Wednesday, 4 August 2010 | | Source: GoldSeek.com
This morning the London Gold Fix was at $1,194.50 and trading after the Fix held that level. Three of the five Bullion banks were buyers and two were sellers. This emphasizes that physical demand is presently dominating the gold price. The Dollar continues to slip against the Yen, the Pound Sterling and the Swiss Franc. There seems to be little reason why it should not continue to fall. The Euro remains weaker against these currencies, but not nearly as weak as the Dollar. Further Dollar weakness could well see it break through support and fall lower. Talk is out there that the Fed is going to re-commence Quantitative Easing as early as next week. If they do it will be good for gold.
New York should open positive and looking for a new direction.
Gold - Very Short-term
Gold has risen and is attacking $1,200. This is not an easy figure to climb! If it holds this level we could see a new perspective in gold. 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
Silver is robust rising again today before New York’s opening to $18.55 up another 15 cents. The silver Fix in London of $18.50. We think today may see a continuation of yesterday’s upward bias in silver.
Gold Price Drivers
The main gold price driver is global investment demand. But considerably more than that is going to influence the gold price. Two new pieces of support have come out this week: -
1. The news from China that the government is allowing the development of the Chinese gold market to go up the next rung of the ladder is very gold positive, short, medium and long-term. It will allow the gold market to expand on most fronts. [We include an article on this giving the full impact on the gold market of these moves in the next issue of the Gold Forecaster newsletter].
2. Costs of gold production per ounce amongst the big producers in Australia and elsewhere have crossed the $1,000 line. If gold were ever to fall back to that level, you would see an almost immediate pullback in production. Supplies would then tighten and send demand chasing gold. This would take prices back to profitable levels. This should comfort investors and underpin a four figure gold price.
The fundamentals for gold continue to improve on both the demand and supply side.
The impact on gold mining companies, particularly the ‘Juniors’ may well be disproportionately good! We have our favorites and publish these weekly in our newsletters. To subscribe, please go to www.SilverForecaster.com or www.GoldForecaster.com].
Regards,
Julian D.W. Phillips
-- Posted Wednesday, 4 August 2010 | Digg This Article
| Source: GoldSeek.com
