-- Posted Tuesday, 10 May 2011 | | Source: GoldSeek.com
It looks like the London Fix is back in control of the gold price. Gold rose through New York and into Asia reaching $1,510, but at the Fix it was set at $1,517.25 and in the euro €1,056.51, rising €5.5 since yesterday afternoon. In the U.S. dollar overnight the gold price rose by $15. Of course the $: € exchange rate continued to play its pivotal role in the price differentials, with it moving from $1.4310 to $1.4343. What has become very clear is that the gold price is backed by irrepressible demand. The E.U. debt problems are far worse than the market had discounted. There is no sign of an improvement either. The peak gold price in the euro was €1,065 and we now stand at €1,056.90. It is clear still that gold priced in the euro is a clear picture of gold demand and supply. However, with the dollar’s gyrations, U.S. gold investors are on a roller coaster.
Silver has risen up from Friday’s $34.66 and up from yesterday’s $36.38 to today’s $38.49.
Ahead of New York’s opening gold stood lower at $1,516.8 and in the euro at €1,055.83 and the dollar at $1.4366 weaker than earlier. Silver stood at $38.50 ahead of New York’s opening.
Gold - Very Short-term
The dollar is the big question today. In New York we will see a positive bias for gold in the euro, but the dollar’s direction appears to be being dictated by emotions not rationality. We feel that the dollar will shortly resume its downtrend. Many factors could change that though.
Silver – Very Short-term
With the big seller seemingly out of the way, silver is up 10%+ since last Friday. We believe that the silver price will have a positive bias in Mew York today still.
Silver & Gold Price Drivers
It appears that the large seller of gold and silver is out of the way. But we have no idea if he simply took some profits with a view to re-entering the market. He may have a longer-term program of sales and is just letting the market recover a little [hopefully one of the members of the London Fixing has reached him and is helping him sell his holding at better prices, more professionally, if this is the case]. The resilience of the gold price must have surprised him as much as the volume of sales last week surprised us all. No doubt as a source of good volumes of gold a clever dealer may have tied a large buyer to him and the quantity can be dealt at better prices for the seller and in good volumes for the buyer thereby avoiding the price gyrations we saw last week.
If it were not for the sheer catastrophic nature of Greece’s plight the euro would have been much stronger now. The market is waiting to see if the E.U. can swallow its new needs or whether it will re-schedule its debt writing off up to 70% in the process. It appears that Germany, et al, will pick up the tab again and when they do the euro will rise possibly over $1.50 again. Just translate that into the gold price in the euro now at €1,056 and you get [$1.50 x €1,056] $1,585. Hence, traders and investors must now see that the gold price is also a dollar bet too.
The silver price is resuming its rise now. It could be that the seller of gold from the SPDR gold ETF was also selling silver from the Silver Trust. If he has stopped selling we will see just how quick a recovery can be and confirm the resilience of silver demand.
We are issuing the full versions of the articles “If China overtakes the U.S. in 2016 then what will the global Gold market look like in 2020?” and “Positive structural changes in Gold supply are happening” in the next issue of the Gold Forecaster and the Silver Forecaster.
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, 10 May 2011 | Digg This Article
| Source: GoldSeek.com
