-- Posted Monday, 17 January 2011 | | Source: GoldSeek.com

Gold Fixed this morning at $1,357.50 and €1,022.98 [almost the same as Friday’s p.m. Fix] after Asia had brought it to $1,364.   As the Eurozone nations enlarge the “rescue package’ to accommodate further nations in need of rescue the markets received the news well, at first.   Then the dollar started to fall again, but the euro overtook it on the downward slope.   The big question now will be, “Is the Eurozone going to do enough to not just save the euro, but retain confidence in it?”   We have no doubt that the euro will survive as a means of exchange but what state will it be in as a measure of value?  Asia is remarkably consistent in its taking gold back up in price overnight.

We note that the SPDR gold ETF is slowly but surely shedding its holdings as it has been doing over the last few weeks.   This prompts the question, are U.S. gold holders selling their shares in this ETF and buying back in Europe?   Or are they regaining their confidence in the dollar and the euro?   It seems more likely that it could be the former to us.  

Apart from covering the gold and silver markets Gold Forecaster and Silver Forecaster are structured in a way that gives perspective to macro-economic factors from oil to currencies covering the pertinent global gold markets that directly affect the gold price and some that simply influence it.   It is a “must-read” for all who want to understand why the gold price is moving as it is and why.   It also aims to help you understand why currencies and today’s national economic problems are influencing the global economy and the precious metal prices [we cover platinum in the Silver Forecaster too].   Subscribe at www.GoldForecaster.com  or for silver at www.SilverForecaster.com].  

Gold - Very Short-term

Gold is moving into high risk territory either way.   Be ready!     

Silver – Very Short-term

Silver is moving into high risk territory either way.   Be ready!     

Gold Price Drivers

The week started with the persistent and growing demand from Asia taking gold back up $5.   This force is here to stay in the gold market.   We believe it will keep growing and having a greater and greater influence on the gold price in the days, weeks and years to come.

The gold price is struggling at the moment as it appears that the Eurozone is widening the size of the ‘rescue package’ available for future bailouts.   One major problem for the Eurozone is that with them committing to saving the E.U. and its currency, you have a tacit guarantee that the debt distresses nations will be saved.   In that event it pays to buy Greek government bonds at over 12% rather than German Bunds at around 4%?   Has the risk gone out of the Eurozone?   Once you see these two on par, yes?   Until then there remains a poor confidence level in the euro.   Beware the mood swings around the euro.   We need reformation and debt repayment to bring real confidence back.   Is that likely?   Until then confidence will continue to rest with the precious metals.

We are issuing a series on “The Financial Earthquake” that lies ahead in the years to come, in our newsletters.   We suggest you subscribe to the Gold Forecaster and Silver Forecaster where you can read these.   It is there that we will we will detail all the factors that will join to jeopardize the global economic landscape in 2011, keep you in touch with their progress and give you our forecasts for 2011.  

                                               

Regards,

 

Julian D.W. Phillips

-- Posted Monday, 17 January 2011 | Digg This Article | Source: GoldSeek.com

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