-- Posted Wednesday, 11 May 2011 | | Source: GoldSeek.com
With the dollar only slightly weaker today, at $1.4368 down from $1.4350 yesterday the gain in the gold and silver price was a real gain. Asia took the gold price up to $1,523 and in the euro €1,060 very close to its peak now. During London’s morning the dollar kept slipping [through $1.44] and gold kept rising [$39.2]. The gold price Fixed this morning in London at $1,524.50 and in the euro at €1.057.95
When New York opened in came sellers taking the price down to $1,509 and the dollar strengthened to $1.4300 with euro gold at €,055.38 still. What is revealing is the sight of a 5 basis point spread on the dollar. Normally you find the quotes, say, $1.4321 - $1.4322, with a 1 point spread but today with such a wide spread, the market expects volatility.
Silver continued to rise until it touched $39 in London, but when New York opened it pulled back to $37.57.
Gold - Very Short-term
The dollar continues to dominate the dollar gold price. In New York we will slightly negative bias for gold both in the euro and the dollar.
Silver – Very Short-term
The question comes up again, is the big seller out of the way?. We believe that the silver price will have a negative bias in New York today.
Silver & Gold Price Drivers
Suddenly the silver price dropped a full euro and $1.5, which implies that the large silver investor may well be back in the market? All spreads have widened including the silver price and the dollar itself. This usually means that the dealers are skittish and covering themselves from sudden price moves. This not only deters deals, but allows a dealer to feel out of a bad deal quickly, when direction is given.
The main reason is that the dollar has turned stronger again and precious metals in the dollar are reflecting that. In the euro gold is steady at €1,055, which is down a couple of euros. Volatility is the order of the day.
This is making market uncertain of direction. The volatility of the dollar is just why its use a s global reserve currency is diminishing. International trade just can’t afford to not know a price or have a price change because of a factor, absolutely nothing to do with the trade. When prices in one day move so much and spreads are so wide in the world’s major currency, then there is a structural fault in the global monetary system that needs to change. Eventually it will as we see the euro price giving much more stability. The Yuan would do even better we feel.
While the day-to-day moves are volatile in all markets, the trends in precious metals remain intact. One must be careful not to let sharp sudden movements to disturb well thought through analysis. With that in mind, we are seeing a trend in gold supplies that are changing the gold market supplies. We will cover that in our newsletters.
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 Wednesday, 11 May 2011 | Digg This Article
| Source: GoldSeek.com
