-- Posted Friday, 20 May 2011 | | Disqus
With Asia taking gold back above $1,500 again, and the dollar slipping back to more than €1: $1.43 it looks like the gold price is rising but in the euro it has held at €1,048.85. Once again the dollar is slipping, not gold rising. What has been interesting is the confirmation of our view that there are professional and ‘official’ buyers coming in ‘on-the-dips”. The corrections are therefore becoming smaller and shorter in duration. This should be the case going forward from now on if this demand persists.
At the Fix in London gold was set at $1,502.75 [up $14] and in the euro at €1,050.87 [up €5] with the dollar standing at €1: $1.4298.
Ahead of New York’s opening the gold price in the dollar stood at $1,495.75 and in the euro at €1,050.46 and the dollar stood at €1: $1.4239.
Silver rose on the day to $34.81 down over $1 on yesterday. Silver continues to consolidate.
Gold - Very Short-term
The dollar continues to dominate the dollar gold price. Euro gold prices are holding so should show a positive bias today, in New York.
Silver – Very Short-term
Silver appears robust at current levels so silver should continue to show a positive bias today, in New York.
Silver & Gold Price Drivers
It seems that the major fund seller has completed his sales and is now out of the market. So once again, the weakening dollar is driving the gold price in the U.S.A. In Europe gold is consolidating still and stands in the euro in the high €1,040 zone. This is still close to the peak of €1,065. The fact that it continues to hold that level is indicative of steady, strong, physical demand. This is emanating from Asia and from ‘official’ buyers.
Their buying is of an ongoing nature, with persistence. It won’t cease because a large order is completed. It won’t sit back and wait for better prices. It won’t turn a seller because its price target is achieved. This type of demand has no price target. It aims to keep hold of the gold bought for the long-term. Price rises don’t signal a time to take profits but merely confirm that the investment is a good one and should continue to be bought. Developed world views on the future of gold have little relevance to an Asian buyer. Technical analysis neither. This is a huge train that won’t be stopped. Passengers who dismount this train are simply going to be left behind.
Despite the media hype that all is soon to get well in the U.S. and developed world economies, it only manages small growth, then slips back as traction gives way in the face of continuing falling confidence in the recovery. The consumer won’t be easy to convince this time round. News that the U.S. economy has slipped back does no good to economic confidence or the effectiveness of statistics themselves triggering spending again. Deep lessons have been learned by the average consumer there, who is now cautious and remains shy of new debt as well as of the banks.
We are going to issue an article on ‘whether George Soros’ exit from his 16 tonnes of gold position signals the end of the ‘bull’ market in gold or not’ 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 Friday, 20 May 2011 | Digg This Article
| Source: GoldSeek.com
