-- Posted Thursday, 12 August 2010 | | Source: GoldSeek.com
Suddenly the markets are getting the message. This morning Asia just held the gold price at $1,200 then it was Fixed at that price. Then, as the New York market was about to open its doors, the gold price jumped ten Dollars. The afternoon Fix was at $1,213. It just has to hold that level for the rest of the day and we are in the ‘gold season’ at the start of Ramadan too for risk levels to drop as direction is given.
What is coming off the pages of the media and out of the markets is that a recession is likely now. With the media so highly developed this talk could make it happen. Some believe the Dollar will strengthen as people run to cash, to Treasuries and trim back foreign deposits to repay Dollar loans [carry-trade unwinding]. There is talk that the gold price could re-couple to the Euro and move in the opposite direction to the Dollar. We think that link may have been destroyed by the Eurozone Sovereign Debt crises. If so we should see the Dollar and the gold price rise together. Why? Because uncertainty and volatility have increased and accelerated.
Gold - Very Short-term
If the gold price holds the current $1,210+ level then direction is given and risk levels will drop down. Today should remain a positive day for gold.
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Silver – Very Short-term
The silver price was fixed at $17.92 down from $18.12 yesterday. By midday London time, both gold and silver started to rise, taking silver back above $18.00 to $18.05. We do expect a positive day for silver in New York.
Gold Price Drivers
As the world grapples with another dose of uncertainty and awaits government stimuli to the economies of the world, a structural change is taking place again in investor mindsets. It will not be the last time this happens this year.
Attitudes to commitments are changing, particularly in the U.S. At all levels of society and down to straightforward house ownership, the shackling nature of debt is giving way. Where possible, people are not prepared to take years to repay debt, when they believe they were not responsible for the housing crash and renege on their debts if they can.
The concept that lender should be as responsible for debt as the borrower, has taken hold. In itself it is undermining the monetary system and is a cultural change that is gold-positive.
A strong economy can only come from a system that holds in crisis times and builds when a nation comes out from that crisis. Look at the growth of China and the state of the U.S. It is time for government to sort the economy out with considerably more vigor than at present.
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Regards,
Julian D.W. Phillips
-- Posted Thursday, 12 August 2010 | Digg This Article
| Source: GoldSeek.com
