New York took the gold price up to $1,806 before the close, then Asia took it up to $1.813 ahead of London’s opening.   London pulled it down slightly ahead of the morning Fix to $1,809 before it was Fixed at $1,810.25 and in the euro at €1,322.22 while the euro was trading barely changed at €1: $1.3691.

Thereafter, it moved back to $1,800.00 with the euro again barely moved at $1.3665, leaving the euro gold price at €1,317.23. 

Silver opened at $40.35 up nearly a dollar [2.5%] from yesterday’s $39.65, following gold up.   Ahead of New York’s opening it stood at $40.30.

Gold _{(very short-term)}

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

Silver _{(very short-term)}

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

Price Drivers

When one looks at the damage a failure by the I.M.F. to pay over the next tranche of bailout money to Greece, it becomes clear that they will get the money no matter what.   The Eurozone just could not withstand another blow such as this could deliver.   We have no doubt that this will give some relief to investors worldwide.   The euro at that point may well run up to above €1: $1.40.   We are of the opinion that the E.C.B. and the Fed are active in ‘stabilizing’ the exchange rate so as to calm markets at a time when they are so sensitive and vulnerable.   However, this does not imply growing confidence in either the euro or the European banking system.   Quite the opposite is happening as near disasters are avoided. Confidence in the system is waning constantly. The actions of other central banks in buying gold spell this out. Indeed, Lloyds of London [Insurance hub] has pulled deposits out of Eurozone banks [it holds around $1 billion there in cash], amongst other depositors fleeing from there.

The impact must be seen on the other main, gold price drivers, Asian demand.   With inflation in Asia a palpable problem and the awareness of the difficulties facing the 40 year experiment with unbacked currencies in the developed world, Asian demand remains healthy and strong, undeterred by short term dramas.  

With the gold markets in the Western world capable of producing volatility, if not strong long-term demand, gold prices do appear volatile.   But don’t be fooled, a 1% move in the gold price is $18.   A 1% move in silver is 40 cents.   Having come from such low levels these sort of moves alarm investors, but looked at in percentage terms the moves are similar to equity market moves these days.  [To get a more complete perspective on gold and silver subscribe to the Gold Forecaster and the Silver Forecaster, now!]                           

Regards,

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