Gold hit $1,684 then pulled back to $1,646 before recovering in Asia to $1,662.At London’s opening it moved to $1,657.All this was against a backdrop of turmoil in global equity markets, which all dropped around 4 – 5% on the day.By comparison, gold and silver are doing well.The euro continued to weaken against the dollar which itself continued to weaken against other strong currencies, despite market intervention by central banks.The euro stood at €1: $1.4140 to the dollar, which fell to 0.7670.Gold Fixed at $1,665.00 75 cents down on yesterday morning [but $14.50 on yesterday afternoon] and in the euro at €1,076.60 down just €10.
Just ahead of New York’s opening, gold rose to $1,660.00 and in the euro to €1,170.50. Silver was Fixed at $39.24 down from yesterdays $41.62, back to the day before $39.1473. Ahead of New York’s opening, silver was trading at $39.15.
Gold(very short-term)
The gold price should be volatile today in New York.
Silver(very short-term)
The silver price should be volatile today in New York as it follows gold.
Price Drivers
Yesterday, the selling got so hard in equities and other markets that people are being forced to cover positions and meet margin calls in moves reminiscent of 2008.When investors are covering margins even gold is susceptible, so its thought, but is that really happening?While bonds and cash are deemed the ultimate ‘safe havens’ the performance of currencies questions even those sacred items.Financial markets are no place for the untutored today.We have already seen even professionals relying on past knowledge to understand today, getting it wrong, particularly precious metals.To illustrate, platinum usually has a premium over gold of $300.Today it stands at $30 – why?Why isn’t gold falling as it did in 2008 when investors covered margin calls by selling gold as well?Gold remains just a few dollars below its record Fix of yesterday afternoon.Subscribe to the Gold Forecaster and the Silver Forecaster to understand the markets you are seeing today!
The Bank of Japan is failing to weaken the Yen as it now stands at Y78.4 again.The dollar and the euro are tumbling against all other currencies.Expect a stream of central banks actions to lower interest rates, buy bonds and institute more quantitative easing.These are actions traditionally taken when interest rates are high, not as low as they are already.The growing lack of confidence over the last year is suppurating into a contagious panic now looking towards a recession or worse.
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