-- Posted Friday, 15 April 2011 | | Source: GoldSeek.com
Gold continued to rise overnight and during the day in London. The main feature was its rise in the euro, because the $: € exchange rate barely changed overnight. It stands at $1.4565. It Fixed at $1,472.50 and in the euro at €1,018.61 up over €11 on the day. This is not exchange rate related but a pure move up by gold. After the Fix and ahead of New York’s opening it rose $1,477.
This is the first day this week that gold has moved firmly in the euro. The news on debt crises and the dangers these may produce for the value of currencies and the stability of the system are the reasons why this move is taking place.
In silver, prices reached record highs over $42 again as the short, sharp correction has now been completed. The silver Fixing was at $42.61. In the euro we saw a Fix at €29.47.
The mood of the market in silver is “I’m sprinting again”. In gold it is, “I’m sprinting again!”
After the Fix, but ahead of New York’s opening gold was seen holding the $1,478 level.
Meanwhile, Silver was holding at $42.46 and moving higher. The dollar stood at $1.4445.
Gold - Very Short-term
The gold price is sprinting again so we expect a positive day for gold in New York today.
Silver – Very Short-term
Silver is in new territory so we expect prices to continue to show a positive bias, in New York today.
Silver & Gold Price Drivers
Back to the Eurozone crisis! Did you feel the lurch down in confidence in the handling of the crisis? If I run a business that is excellent, but I use all the credit I can get my hands on, then for reasons outside my control the business sags and I find it impossible [until my turnover rises back to former levels] to repay that debt, then lending me more money does postpone the day of reckoning, but it increase my debt burden. Now check the numbers and you find that I just cannot repay that burden of debt, what do you do? In my case the bank would sequestrate me, sell my assets then close the books on me. Is it any different with a nation?
Greece will not be able to repay its debt without selling off national assets or lengthening the repayment date by a decade or more. The Greeks will not accept these solutions for sure. Alternatively 40% to 50% of the debt must be written off. Which banks will fall then? Perhaps the E.U. will step in and ‘re-capitalize’ those banks with new money? This removes the deflationary impact [it’s called Quantitative Easing] of the write-downs. In turn this gives the Greeks a balance sheet that allows them to get back on their feet.
However, the fact that this is a surprise to all, including the E.U. officials, tells the outside world that the same may be true in the cases of Ireland, Portugal and even perhaps Spain and Italy who will certainly fall into the hole if their debts are too high and their ability to repay weak. This adds a notch of desperation to the Eurozone crisis now! No wonder gold is climbing in the euro! We are completing a piece on how banking is contributing to the rises in gold and silver for the next issue of the Gold Forecaster and Silver Forecaster.
[The Gold Forecaster and Silver Forecaster are a “must-read” for all who want to understand why the gold and silver prices are moving as they are and why.] Subscribe at www.GoldForecaster.com or for silver at www.SilverForecaster.com].
Regards,
Julian D.W. Phillips for the Gold & Silver Forecasters
-- Posted Friday, 15 April 2011 | Digg This Article
| Source: GoldSeek.com
