-- Posted Friday, 23 September 2011 | | Disqus

As fear gripped virtually all markets, the gold price was savaged in one day by $73, leaving it 10% down from its peak.   Asia in turn was infected with market fear and did nothing to raise the price.  London opened this morning at $1,732 and in the euro at €1,280.60 with the exchange rate at €1: $1.3522, in a market that continues to threaten more volatility.   London then pulled it slightly down to $1,732 ahead of the morning Fix which was set at $1,730.00 and in the euro at €1,279.68 while the euro was trading hardly changed at €1: $1.3519.   The market smells just like it did in 2008 when the de-leveraging by investors in all markets was underway. Thereafter, in London it fell further to $1,710.40 with the euro again barely moved at $1.3458, leaving the euro gold price at €1,270.91.  Ahead of New York’s opening it stood down at $1,703.75 with the euro at €1: $1.3432 leaving euro gold at €1,268.43.

Silver opened in London down at $33.13 down $7 from three days ago.   This was a North American investor flight to cash and from leveraged positions.   Ahead of New York’s opening it stood at $32.54.

Gold _{(very short-term)}

The gold price should continue volatile to later stabilize, today in New York.

Silver _{(very short-term)}

The silver price should continue volatile and weaker, today in New York.

Price Drivers

While the smell in markets is reminiscent of 2008, yesterday’s moves in so many and varied markets, right across the world, confirmed we are headed into far deeper waters.   In 2008 the tools to put matters right were believed to be in the authorities hands.   Since then we have heard a cacophony of reassuring words and actions that have failed to put matters right.   We have now entered a period when zero growth or a recession is upon us.  Are we, aren’t we days have given way to a certainty, if we are to believe the markets.   At the same time we are back to the political in-fighting that destroys government’s ability to govern.  The Eurozone is in the midst of a banking crisis that is far worse than that of 2008.   What is the way forward?  

What does history tell you?   What has been the performance of precious metals since the turn of the century, in 2008, then 2009 right up to today?   What lessons have been learned over this time?   When we look at an uncertain future this time, we have to now factor in government inability to govern, the unlikelihood of debt being repaid and a future where growth in the developed world is not going to happen and where capital is sidelined until it has a profitable place to go.   Broad investment strategies must be re-thought and quickly if more damage is to be avoided in the days ahead. To this end we repeat, “There is a point, following the example of Asia, when investors in the developed world are going to realize that gold and silver are an alternative…..”

Certainly, Asia will show the way in the days ahead as they look at buying opportunities despite the falling Rupee.   What are you going to do? 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

-- Posted Friday, 23 September 2011 | Digg This Article | Source: GoldSeek.com

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