-- Posted Monday, 24 January 2011 | | Source: GoldSeek.com
Before New York opened the gold price stood slightly higher in both the U.S. dollar and the euro. It was Fixed in London this morning at $1,347.5 and at €993.81. The euro stands at $1.3558 slightly higher against the dollar as euro yields are more attractive than those on the dollar. The dollar remains steady against other ‘hard’ currencies. The three- month euro interbank offered rate is 1.03%, compared with 0.30% for the London interbank offered rate in dollars.
The news this morning is that the Irish government has collapsed ahead of its signing of the passing of the budget containing the austerity measures. Passing the budget is a condition of Ireland’s 85 billion- euro aid package from the I.M.F and the European Union. Prime Minister Cowen said the finance bill has to pass before national elections are held as scheduled on March 11. Irish political leaders said they’ll press to pass a budget before elections as the collapse of Prime Minister Brian Cowen’s coalition threw the government into disarray. If they don’t, you will see the euro come under pressure again.
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Gold - Very Short-term
Gold’s risk remains high even after Friday’s fall in New York. We expect it to tend to weaken still today.
Silver – Very Short-term
Silver’s risk remains high even after Friday’s fall in New York. We expect it to tend to weaken still today.
Gold Price Drivers
U.S. federal government debt will climb to 99% of gross domestic product this year from 93% in 2010, while the euro region will total 87%. The U.S. has made next to no progress in reigning in their deficit. It remains difficult to retain confidence in either currency as a measure of value, but it must be understood that the fall in the euro was because of a fear that it would not survive at all. It’s value is a secondary factor. The key need is for it to survive as a means of exchange, which we have no doubt it will.
It is assimed, confidently; that the Irish Parliament will pass the budget incorporating the austerity measures. But then it was also assumed that the present government would pass the Bill. If the opposition, who look as though they will be the next government, wants to negotiate the interest rate on the rescue package, they will weaken their arm if they too vote for the budget. By voting for it they will be seen to approve it. Many outside Ireland believe that they will not be able to repay the package on the terms set out. So that looks to be the next point of crisis in the Eurozone debt crisis. It is generally thought that while Greece and Ireland will not default, they will have to re-structure their packages.
We are issuing a series on “The Financial Earthquake” that lies ahead in the years to come, in our newsletters in the weeks to come alongside our forecasts for the factors that affect the gold price. 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 in 2011.
Regards,
Julian D.W. Phillips
-- Posted Monday, 24 January 2011 | Digg This Article
| Source: GoldSeek.com
