-- Posted Tuesday, 7 December 2010 | | Source: GoldSeek.com
With a gold Fix of $1,426.00 in London’s morning and a euro at $1.3368 we are in more than record territory. There can only be a few traders left who will look at the $: € exchange rate to point out what gold should be now. Gold in the euro is at a record €1,065.85 telling us that Europeans are happy to pay up for gold as the Eurozone crisis deepens. When the euro was first initiated in 1999 many believed you could not yoke a strong economy to weaker ones. This is now proving true as Germany has thrived on the trade and economic advantages of the Eurozone. While initially gaining loan advantages, the poorer nations are now finding the price was far too high. European history is over 2,000 years old and there has hardly been a day when the group of nations, making up Europe, has acted in financial harmony. The grand experiment of the EU, while noble in intent, is now showing why structurally, the monetary zone could not be a structure capable of weathering all seasons.
It was Asia that took the gold price to $1,425 before London went along with that price.
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Gold - Very Short-term
Gold is so strong it looks authoritative. We continue to expect a neutral to positive day in New York. Eurozone events continue to influence New York’s gold price.
Silver – Very Short-term
Silver is above many targets at $30.45 continuing to outperform gold. But it is moving with gold for similar reasons, monetary ones. We still believe it will follow gold so we expect a neutral to positive day for silver again, in New York.
Gold Price Drivers
While it was again Asia that took the gold price well into the mid-$1,425 area London and Europe followed through leading us to believe that the demand is more than sufficient to outweigh anything sold in the U.S. With the Eurozone problems still capturing the attention of the gold market, two events took place, yesterday that were beneficial for gold. The first was the EU Finance Ministers did not put forward solutions to the debt crisis, but Germany rejected the two constructive suggestions made. It looks like the Ministers have around two weeks to come up with a market-credible solution to the crisis or catastrophic events could unfold in the Eurozone. In the States Mr. Ben Bernanke told us all that the battle to resuscitate the U.S. economy is still fiercely on and may require more QE than the $600 billion on the go now. This is gold positive. The Fed’s admirable efforts need to be led by a vigorous government set of actions, without which not enough can be achieved. The U.S. continues in trouble! At Gold Forecaster, we see our task to give you that perspective [subscribe at www.GoldForecaster.com or for silver at www.SilverForecaster.com ].
Regards,
Julian D.W. Phillips
-- Posted Tuesday, 7 December 2010 | Digg This Article
| Source: GoldSeek.com
