-- Posted Friday, 24 September 2010 | | Source: GoldSeek.com
Again Asia has led the way overnight. The gold price stood at $1,298 as London accepted the price and Fixed it at that level in the morning. Ahead of New York the price went up a $ leaving only one more dollar to go before there is a new ‘big’ figure of $1.300. It is the relentless Asian demand that is pushing the large institutional buyers, buying with ‘limit’ orders, to up their limits.
Equity markets continue to tend lower as the fear of deflation weighs far more heavily than future expected inflation. We are getting to the point where bad news is overwhelming the small amount of good news that comes out from time to time on the developed world’s economic front. We are now in a mindset that expects bad news. This mindset alone is assisting in the drift to deflation as we mentioned yesterday. So in the gold and silver markets, we have rising and enormous potential demand for precious metals as savers there respect these metals as wealth preservers and developed world demand stutteringly coming in for the two metals as bad news arrives. Developed world demand is oblivious to Asian demand as is Asian demand to developed world economic data.
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Gold - Very Short-term
Gold looks like moving into a new ‘big’ figure of $1,300 today.
Silver – Very Short-term
Silver has begun to sprint again now standing at $21.36 after a Fix of $21.35 and looking strong.
Gold Price Drivers
If you look at the oil market you can see how the developed world demand is sliding relative to past highs, but Asian oil demand is rising fast and will be sufficient eventually, to take the oil price higher than ever before, even with a deflating developed world.
The same is true in the gold market. While jewelry demand is recovering in the developed world, burgeoning demand in Asia will swamp developed world demand, even if the developed world is deflating.
Most precious metal commentators continue to focus on developed world economic data as the driving force behind the gold price rise and will do so until Asia cannot be ignored. This may prove distracting to a full understanding of the precious metals markets.
Regards,
Julian D.W. Phillips
-- Posted Friday, 24 September 2010 | Digg This Article
| Source: GoldSeek.com
