-- Posted Monday, 22 November 2010 | | Source: GoldSeek.com
The Irish have accepted the bailout and look like they now have a serious political problem. We have yet to hear the details, but expect a very unhappy Ireland for the next few years. The attention is now swinging to Spain where the economy is at zero growth with no prospects for improvement. The trouble with paying back debt when you’re in trouble is that you don’t have sufficient income to repay debt and survive. The gold price responded overnight in Asia, by rising over $1,360 
but Fixed again at $1,357.50. Ahead of New York the gold price dropped back to $1,353 as it always does. Big buyers are still there but buying gold that is offered, not chasing prices still. This was confirmed by figures from Russia which reported another chunk of gold bought, 18.66 tonnes, in October. The euro rose to $1.3758 before weakening to $1.3671 ahead of New York’ opening.
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Gold - Very Short-term
Gold remains close to the top of its consolidation trading range even after the Irish news. Buyers are not chasing prices and are happy to be led by the market. The robustness of the gold price should hold the gold price close to these levels still.
Silver – Very Short-term
Silver looks stronger than gold again, standing at $27.4. We don’t expect it to run higher in New York but hold around these levels today in New York.
Gold Price Drivers
Gold is sitting in a rather quiet holding pattern. The troubles that are facing the global economy and global money are deeply fundamental. However, that perception has not filtered down to day to day short-term moves. It is rather like a change in current or the tide at the seashore. It’s so easy, but superficial, to say, “gold was overbought and is now oversold”. That’s like saying “the wave came in and now its going out.” More is needed if one is to understand where gold and silver are going next. Right now traders have gold moving in line with the euro, because that’s the way it has gone for sometime, so why not now? When it makes a large move, that relationship breaks down as gold rises in the euro. Well today the euro is heaving a sigh of relief as the funding of the Irish rescue proceeds, but for how long now?
Behind the scenes central bank buying continues both on the open international market and from local production in both Russia and China. We fully expect more producers to take more of their locally produced gold into their reserves at market related prices, so that open market global supply will continue to decline.
Regards,
Julian D.W. Phillips
-- Posted Monday, 22 November 2010 | Digg This Article
| Source: GoldSeek.com
