-- Posted Wednesday, 3 August 2011 | | Disqus

Breakout!   We are delighted to say that our market Alerts of late were perfectly timed to give the correct entry point ahead of the recent breakout of $1,555 and in silver prior to that at $35 in silver.   One has to ensure that a ‘floor’ has been formed before the rise, before one alerts subscribers.   And here we are with gold really taking off yesterday after the debt-ceiling raising deal was signed into law.   That was when gold stood at $1,625 [the day before it was $1,615] and at €1,117.54 in the euro.   This morning as London opened gold stood at $1,669.15 down $3 from today’s peak but up $54.15 in the last two days.   In the euro it stands at an amazing €1,171.38 up €53.84.   Gold Fixed in London at $1,667.50 and in the euro at €1,163.40.

The dollar is not so changed against the euro at $1.4252 as against yesterday’s €1.4183.   The dollar has slipped to Yen 77.2 and the Bank of Japan has put the market on notice that they may intervene.   The dollar fell again, against the Swiss Franc to o.7767.   The Swiss National Bank has intervened to weaken the Swiss Franc too.   But the euro fell alongside the dollar.     Just ahead of New York’s opening, gold continued to rise to $1,669.75 and in the euro to €1,168.15.   This is now at another record high!   Silver was Fixed at $39.73 after yesterday’s $39.31.   After the Fix at $41.04 silver was trading at $41.12 ahead of New York’s opening.  

Gold _{(very short-term)}

The gold price should have a stronger bias today in New York.

Silver _{(very short-term)}

The silver price should have a stronger bias today in New York as it follows gold.

Price Drivers

Today we are witnessing that neither the Swiss Franc nor the Japanese Yen are safe havens against a falling U.S. dollar and Euro.   More than that, these actions are an indictment of the system of currencies as alternatives to each other.   This elevates gold and silver as ‘counters to currencies’.   This consequence has arisen because of the, now clear failure of the U.S. Congress to rein in spending sufficiently or to raise taxes in a manner to rein in the U.S. deficit.   The loss of confidence in the doll, the euro and now the alternative strong currencies has made the structural weaknesses of currencies patently visible to professional investors.   Gold, in terms of weakening currencies has jumped over 3% so far as a direct result.   Is it any wonder that Thailand bought 17.7 tonnes of gold and Korea 25 tonnes of gold for their reserves in the last two months?   We will discuss these situations properly, in the next and coming issues of the Gold & Silver Forecasters.

This is a significant day in the global monetary system.   For the last 40 years the developed world has insisted that currencies are the definitive money and that gold [it goes without saying too that silver is the same] is a ‘barbarous relic’.   Reflect, if you will, on currency and national debt management over the last four years and the decade of blithe confidence before that.   The smart money went into gold during this time and has multiplied six times in a decade.   Need one say more?

Regards,

Julian D.W. Philips for the Gold & Silver Forecasters

-- Posted Wednesday, 3 August 2011 | Digg This Article | Source: GoldSeek.com

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