-- Posted Wednesday, 4 May 2011 | | Source: GoldSeek.com
Gold continued to consolidate in Asia, taking it up to $1,536 from the close of $1,530. But the dollar began to fall as London opened and currently stands at $1,4874 leaving gold in the euro at €1,033.41.
The Fix in London was set at $1,536.00 down $10 on yesterday and in the euro at €1,033.23, down €12 on yesterday. This makes the Fix [the main market maker] pretty stable from last week through to this week. This is a fair reflection of demand and supply. The gold price is consolidating and we read it as having been in a narrow trading band for the last two weeks. Because of the thinness of the holiday trade, we do not include the very volatile prices seen over that time.
Silver is weaker and stand at $41.77 down just over $1.5 on the day. It is struggling to hold these levels.
After the Fix, but ahead of New York’s opening gold held at $1,535.30 and the dollar stood at $1.4855. This left gold in the euro at €1,033.52. Silver stood at $41 ahead of New York’s opening.
Gold - Very Short-term
The gold price should continue to consolidate today in New York today. The dollar price is still dominated by the dollar’s exchange rate and should move accordingly.
Silver – Very Short-term
Silver is consolidating at lower levels and should have a weaker bias in in New York today.
Silver & Gold Price Drivers
Yesterday 5 tonnes of gold was sold from the U.S. based gold Exchange Traded Funds as the volatility seen at the weekend affected these investors and they sold. Now the market is consolidating at lower levels.
With Indian demand at a peak at the moment ahead of their annual Akshaya Tritiya festival on May 6th physical demand remains robust in Asia. It must be remembered that wholesalers buy in London or direct from the various refineries [through the mines] and import it to India. These importers are usually banks, like Standard and Chartered bank, who decide the right points at which to buy.
In India itself, the jewelers and dealers will then buy from the importing bank, but often be given payment terms that allow them to pay when they sell, so that they have no price risk. Standard Chartered clearly cover their risks too. This means that the off-take of gold from the market is not a steady constant stream, but in a series of jerks, when the banks see fit to pick up stock at what they deem to be the right prices, from the gold price Fixings, usually.
Portugal’s bailout of $115 billion will have little direct effect on the gold or silver prices, for it is simply part of the ongoing Eurozone crisis. Its terms are easier than both Ireland’s and Greece’s. However, both those countries may well have their terms softened. It is a misnomer to call the bailouts as ‘revivers’ of the economies involved. These are loans that hopefully will stave off defaults. The nations in receipt of these bailouts not only have to cut back on spending, but they have to raise the revenue to repay these loans. With the economic clouds darkening over most parts of the Eurozone [except Germany] this may prove to be more difficult than budgeted for. We certainly don’t think this does away with the Eurozone debt crisis.
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 Wednesday, 4 May 2011 | Digg This Article
| Source: GoldSeek.com
