-- Posted Thursday, 8 September 2011 | | Disqus

The gold price has gone from its record $1,912 level to $1,800 and this morning bounced back to $1,840.   The fall was a 5% fall and the current bounce so far a 2% rise.   It sounds smaller in percentage terms.   As London came to life the gold price started to recover even more.   The €1: $1.4062 is hardly changed against the euro as both of them continue to fall.   The Swiss Franc continues to be weakened at 0.8618, but the Swiss National Bank are keeping it at SF 1.20 or weaker against the euro.   That’s the rate to watch. In the euro gold stood at €1,308.49.   During London’s morning the gold price bounced around and was finally Fixed at $1,827.00 and in the euro at €1,298.88.  Thereafter and ahead of New York the gold price rose well to $1,850.50 and in the euro to €1,317.65, while the euro stood against the dollar at €1: $1.4044.  

Silver opened at $41.67 a dollar lower than Tuesday’s level in line with gold’s fall.   It held around that price for the rest of London’s morning.   It continues to give a solid base-building performance ahead of New York’s opening.  Ahead of New York it stood it had claimed back the lost dollar and was trading at $42.29.

Gold _{(very short-term)}

The gold price should be mixed, today in New York.

Silver _{(very short-term)}

The silver price should be mixed, today in New York.

Price Drivers

To give you perspective on the gold price moves, the $80 move down yesterday was a 4% move.   The extreme volatility we have seen in New York, we see as traders and speculators making hay while market volumes are thin.   Once there is substance to the market, expect more upward volatility.   Such volatility is great for traders, but not a reflection of true demand and supply.   But expect many traders to get burned in the process.   We are told that 52% of professional trader’s trades only succeed.   That’s because they chase prices not the underlying asset story.   This makes them a completely different animal to an investor. However, large gold buyers of gold may well be guided by the Indian investor’s mentality, which is to stand back when there is volatility.   Indian buyers want to see a gold price settle on support before they buy, knowing that they will not see lower prices after they fall.

We will be covering the history of gold price ‘management’ in our next issue of the Gold Forecaster and Silver Forecaster. To get a more complete perspective on gold and silver subscribe to the Gold Forecaster and the Silver Forecaster, now!

German courts gave the ‘OK’ sign to German bailout support, with the proviso that Parliament be consulted.   We see this as a negative sign for the inability to give clear direction is not supported by Parliamentary votes, which will slow if not de-rail such moves.   The chances of a Eurozone breakup increased with this decision, we feel.  Angela Merkel and her party are already on a slippery downward slope politically, so cannot be seen to support further bailouts, without broad Parliamentary support, if she wants to retain power.   If the Eurozone were to break up and the weaker states ejected, from the euro, we see the euro shooting up, but that’s not what Europe wants, yet either!   Expect tremendous volatility in the euro from now on.

Regards,

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

-- Posted Thursday, 8 September 2011 | Digg This Article | Source: GoldSeek.com

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