-- Posted Monday, 8 August 2011 | | Disqus
A new week and a new world! Gold vaulted in Asia to $1,710 then pulled back to $1,705 before recovering at the morning Fix in London at $1,709.75 and in the euro at €1,095.20.
The euro continued to fall alongside the dollar at €1: $1.4216 but both fell again against the Swiss Franc [$1: SF 0.7628] and the Yen [$1: Y77.8 after Y75.5], despite the Bank of Japan’s intervention in the foreign exchanges to weaken the Yen. We expect to see both the SNB and the B of J continue to try to weaken their currencies while speculators feed on such intervention.
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 $39.86. Ahead of New York’s opening, silver was trading at $39.87.
Gold (very short-term)
The gold price should be stronger today in New York.
Silver (very short-term)
The silver price should be stronger today in New York as it follows gold.
Price Drivers
The S & P downgrade of the U.S. to ‘AA’ from ‘AAA’ was a clear statement on the political ability to manage U.S. finances which the market, through its performance, has agreed. In Europe, the situation was not too different. Equity markets continued to tumble, signaling a potential crunch that may be similar to the August 2007 one. The game of political denial over the irresponsibility in the handling of the debt-ceiling agreement, fails to address the real issues in the market place. The fallout from that was triggered by the downgrade, but it would have happened anyway. The acts by the Swiss National Bank and the Bank of Japan of attempting [and largely failing] to weaken their exchange rates have undermined confidence in the entire monetary system, for there is no longer a safe, ‘safe-haven’ amongst the world’s currencies. This is like destroying a boat’s rudder.
The specter of a more serious ‘credit crunch’ of a similar but potentially more serious one than we saw in August 2007, sits in front of us. This time it will be on the back of a monetary world that has been severely weakened since then. Any banking crisis that breaks out now cannot simply be contained by central bank purchases and quantitative easing, because that has already been seen to fail to rectify matters. The feared ‘abyss’ is a lot more to be feared than then.
The leap of gold to over $1,700 has shaken many in the investment world and making them re-think the state of the investment climate now. Just look at the performance of gold in the different currencies below! We cannot address all the issues here, so we suggest that you subscribe to the Gold Forecaster and the Silver Forecaster to understand the markets you are seeing today!
Regards,
Julian D.W. Phillips for the Gold & Silver Forecasters
Gold Prices to Highlight Currency Moves |
| Today | Yesterday |
Franc | Sf1,301.14: 1 oz. of gold | Sf1,291.47: 1 oz. of gold |
US | $1,706.75.00: 1 oz. of gold | $1,665.55: 1 oz. of gold |
EU | €1,199.15: 1 oz. of gold | €1,169.05: 1 oz. of gold |
India | Rs. 76,684.26: 1 oz. of gold | Rs.74,189.43: 1 oz. of gold |
-- Posted Monday, 8 August 2011 | Digg This Article
| Source: GoldSeek.com
