-- Posted Monday, 9 May 2011 | | Source: GoldSeek.com
Gold fell heavily in New York last week, down to $1,462 at its low and now has recovered to $1,505. On Friday Greece’s debt problems suppurated again and excited gold buyers in Europe. In the euro the gold price jumped from €1,024 to €1,044 on the day. The euro fell against the dollar over the week, it was not the dollar rising, it now appears. No rise in euro interest rates and the news from Greece were responsible for its fall. Gold was Fixed at $1,505.00 and in the euro, €1,044.85 near to the top of its recent trading range.
Silver fell back to $36.38 up from Friday’s $34.66.
Ahead of New York’s opening gold stood lower at $1,502.15 and in the euro at €1,046.87 and the dollar at $1.4349 weaker than earlier. Silver stood at $37.29 ahead of New York’s opening.
Gold - Very Short-term
The gold price in the euro is very strong and is recovering in the dollar too. In the U.S. gold should continue to follow the dollar’s exchange rate. If the U.S. SPDR investor has finished selling, we expect the recovery, to continue, but if not and if his sales continue to be handled badly, the price may be knocked down again in New York today.
Silver – Very Short-term
Silver has been pulled higher by London and Asia. As with gold, should the U.S. selling from the Silver Trust in the U.S. persist expect another fall in the silver price. If it has finished expect the silver price to recover in New York today.
Silver & Gold Price Drivers
Before New York closed on Friday gold reached $1,495. The dollar stood at $1,4308 [3.37% better] stronger by 5 cents on the week and the markets were bewildered after a clumsy and heavy sell-off of the precious metals had taken gold down to $1,462 and silver down to $34. Here we are on Monday with gold at $1,505, the dollar at $1.4393. This hides a dramatic change from those who just look at the dollar price of gold. In the euro gold has in the recent past been as low as €1,011, but has traded between €1,018 and €1,040 over time. On Friday gold in the euro jumped up to €1,044 and now stands at €1.46 after London’s morning Fix. The clumsy seller sold around 20 tonnes into a market that absorbs around 25 tonnes a week from miners. The implications of the extra tonnage being absorbed quickly are twofold. Either there are large buyers who are able to take such extra tonnages off the market quickly and easily [which we discuss in more detail in the next issue of Gold Forecaster] or the news about Greece needing even more of a bailout triggered the gold market into action on the upside. Or perhaps it was a mixture of both.
1,000 tonnes of silver has been sold from the Silver Trust in the States in the last two weeks. Has the selling stopped? We will have to wait and see.
The news about Greece is considerably more serious than at first appears. The Mediterranean members of the E.U. are expected to see much lower tourist revenues or building demand until a European recovery has been strong enough for long enough to have absorbed the overhang that still exists in the building industries there and for the Tourist industry to have recovered for some time. Only then will it be in an economic condition to repay debt effectively from recovered Tax revenues. This could be as long as four years away. Any excessive debt repayment demands will lead to re-scheduling of their debt. Greece is already in those cross hairs and we believe that Ireland is even now facing re-scheduling. This we believe, triggered the European demand for gold.
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 Monday, 9 May 2011 | Digg This Article
| Source: GoldSeek.com
