-- Posted Tuesday, 3 May 2011 | | Source: GoldSeek.com
Today, all markets are back from holiday. Asia did nothing about the pullback in prices of gold and silver. Before London opened silver stood at $45. And gold at $1,546 and the U.S. dollar at 1.48.
The Fix in London was set at $1,546.50 and in the euro at €1,045.20. Please note that on Thursday ahead of the weekend the gold price was set at $1,535.50 and in the euro at €1,034.36. The thin trade over the weekend saw gold shoot up and then retreat, but still leaving gold up $10 and €11 after the weekend.
With the increase in margins requirements on COMEX silver prices retreated in Asia after a bear raid and have yet to recover. They are still holding at above $43.35 ahead of New York’s opening.
After the Fix, but ahead of New York’s opening gold held at $1,537.95 and the dollar stood at $1.4781. This left gold in the euro at €1,040.49 down €8.
COMEX – Margin requirements rise.
The only change in the silver market is an increase in margin requirements for speculative traders. On the CME, the exchange is raising initial margin requirements to U.S. $14,513 from U.S. $12,825 per contract. Maintenance margin requirements will increase to U.S. $10,750 from U.S. $9,500 per contract. For hedgers and exchange members, both the initial and maintenance margin requirements will also increase, to U.S. $10,750 from U.S. $9,500 per contract. Of course, accounts that do not have the required margin requirements were liquidated immediately. Please bear in mind that other silver investors may have reacted to this too. On COMEX only around 5% of all transactions result in a movement of physical silver so this should not have produced the reaction on the silver price that it did. However, traders are very quick off the mark and closed positions, again triggering stop losses taking silver prices down to these low levels of $43.82. Investors in the Silver Trust did sell off 136 tonnes, but that is not an exceptional amount for the Trust. Nothing has fundamentally changed in silver over the weekend.
Gold - Very Short-term
The gold price should continue to consolidate today in New York today.
Silver – Very Short-term
Silver is battling the speculative action over the weekend and should continue to consolidate in New York today.
Silver & Gold Price Drivers
With all markets open today the volatile holiday weekend action should calm down now. Traders and speculators ruled the roost over the weekend and have caused the larger investors to pause for thought. We can see that in London’s day and ahead of New York’s opening. The death of Osama bin Laden is irrelevant to both gold and silver prices.
The dollar has recovered slightly in London although it remains right on the edge of lower levels. This story will continue to dominate both gold and silver in the days and weeks to come. It is so because the U.S. economy is in a worse state than reported by the media. It is hovering above ‘stagflation’ which is more painful than simple inflation. Stagflation has a deleterious impact on confidence itself, which leads to more downturns. With the negative interest rate picture in the States the entire situation is very gold positive. However, U.S. investors are by no means the drivers of the gold price at the moment.
We cover the implications for gold in macro-economic and currency events in all the issues of the Gold Forecaster and the Silver Forecaster for subscribers. [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 Tuesday, 3 May 2011 | Digg This Article
| Source: GoldSeek.com
