-- Posted Wednesday, 10 August 2011 | | Disqus
With the U.S. gold market closing at $1,740, yet again Asia took it higher to over $1,762 at London’s opening. Silver is lagging behind at $38.4 on fears that its industrial side will undermine its rising price. The dollar continued to slip but slightly faster than the euro today at €1: $1.4354. In the euro gold is crossed is holding the level of €1,227.29.
In London the gold price Fixed at $1,753.75 and in the euro at €1,219.07. Ahead of New York, the gold price was recovering to $1,756.35 and in the euro to €1,221.30 and the dollar weakening against the euro to 1.4381. Silver was Fixed at $38.36 and is only at $38.11 ahead of New York’s opening.
Gold (very short-term)
The gold price should be stronger today in New York.
Silver (very short-term)
The silver price may well continue to hover before rising today in New York.
Price Drivers
The Swiss National Bank is howling at the strength of the Swiss Franc, now standing so strong against the dollar at 0.7206. A fortnight ago it was at SF 0.80 to $1. Its international trade will be savaged with such a rise in its value. Likewise the yen will just not weaken against the dollar despite the intervention and QE expansion they are pumping into the system. The Swiss National Bank said that it will “significantly increase” the supply of liquidity to the money market and expand banks’ sight deposits to 120 billion Swiss francs ($166 billion) from 80 billion francs. It will also conduct foreign exchange swap transactions to create liquidity. The measure was last used in 2008, the SNB said. Expect more action from the Bank of Japan too. The reason the currencies are so strong is because holders of dollars and euros are fleeing the weakness of those currencies and clinging to currencies and precious metals that will, hopefully, retain their value in all this financial turmoil. With the SNB and the B of J weakening their own currencies the flight to safety looks like being disappointing. Gold does not have a central bank of its own to protect it, but the way the price is going shows that it doesn’t need one.
Mr. Bernanke’s statement that interest rates would be held down for the next two years may well benefit the U.S. economy and in turn silver.
Some investors previously felt that platinum would do the same job of value protection as gold, but the loss of platinum’s $300 premium in the space of a fortnight has dispelled those hopes in quick time. Platinum depends on the auto industry for its demand primarily. A developed world downturn will hurt that demand, so the price just could not rise with gold anymore. Apart from that is it not in the interests of the producers to see platinum follow gold. The producers are in a position to weaken the price too!
To get the full picture on the precious metals, 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 | Sf1,275.72: 1 oz. of gold | Sf1,317.38: 1 oz. of gold |
US | $1,756.35: 1 oz. of gold | $1,750.90: 1 oz. of gold |
EU | €1,221.30: 1 oz. of gold | €1,229.82: 1 oz. of gold |
India | Rs. 79,325.54: 1 oz. of gold | Rs.79,214.22: 1 oz. of gold |
-- Posted Wednesday, 10 August 2011 | Digg This Article
| Source: GoldSeek.com
