-- Posted Wednesday, 24 August 2011 | | Disqus
As we have been pointing out many times, the current buyers of gold are not price chasers. The action in the gold market has confirmed that as we see overnight. Gold pulled back from yesterday’s high over $1,900 to $1,840 in Asia, from where it rose $7 ahead of London’s opening.
The €/$ exchange rate has not moved that much and stands at €1: $1.4346 with the euro stronger by 68cents overnight. This leaves gold in the euro at €1,275.09 down from yesterday’s €1,322.11. All currencies remain stable with the Yen at Y76.58 and the Swiss Franc at 0.7905.
At the Fix in London, it was Fixed at $1,850.00 down from yesterday morning’s Fix at $1,886.50 and in the Euro at €1,279.30 after yesterday’s €1,301.75. The €/$ exchange rate was at €1: $$1.4461 at the time. Thereafter it dropped back slightly to $1,845 ahead of New York’s opening.
Silver was Fixed in London yesterday at $42.88 but traded at $42.14 this morning in London in line with the fall in the gold price and ahead of New York’s opening.
Gold (very short-term)
The gold price should have a steady to weaker bias, today in New York.
Silver (very short-term)
The silver price should have a steady to weaker bias, today in New York.
Price Drivers
In the past, in developed world markets, speculators and traders had a big influence on gold and silver prices over a longer period than is now the case. As we have seen in the last few weeks traders and speculators have been wrong-footed as gold and silver prices were not chased by the long term investors. Take yesterday for instance, the gold price hit over $1,900, but there was no follow through by long-term investors, who simply stood back and allowed the gold price to fall. Buyers now need to see the offer of gold, not just the price. So when the gold on offer is small, they stand back and wait. At the London Fix, where the bulk of physical gold is moved, we see prices more reflective of the current supply and demand. Outside the Fixes gold prices become volatile.
This behavior diminishes the influence of traders and speculators who cannot afford to take longer term risk positions in physical gold. Look back over the bulk of the year and we see that this pattern has grown and begun to dominate the market.
What does this do to the prospects of a major correction? It reduces it considerably and turns such corrections into consolidations. To get a more complete perspective on gold and silver subscribe to the Gold Forecaster and the Silver Forecaster, now!
At the end of this week, developed world and Indian demand returns to the market as the ‘gold season begins.
Regards,
Julian D.W. Phillips for the Gold & Silver Forecasters
Gold Prices to Highlight Currency Moves |
| Today | Yesterday |
Franc | Sf1,455.89: 1 oz. of gold | Sf1,480.65: 1 oz. of gold |
US | $1,845.00: 1 oz. of gold | $1,879.00: 1 oz. of gold |
EU | €1,276.99: 1 oz. of gold | €1,297.74: 1 oz. of gold |
India | Rs. 84,464.47: 1 oz. of gold | Rs.85,736.89: 1 oz. of gold |
-- Posted Wednesday, 24 August 2011 | Digg This Article
| Source: GoldSeek.com
