-- Posted Tuesday, 4 October 2011 | | Disqus

As the euro started to really slide, gold continued to recover in Asia through to $1,660 as the euro weakened to €1: $1.3177 down 2.5 cents. When London came to life, the gold price held there, rising ahead of the Fix to $1,672.75. Gold was Fixed at $1,672.00 and €1,267.05 while the euro traded at €1: $1.3196 with two of the five members of the gold Fixing buyers and two were sellers. Ahead of New York, the gold price slipped back to $1,647.60 and in the euro to €1,250.27 while the euro was at €1: $1.3178.

The silver price started the day at $30.88 following gold but not with quite the same vigor. It held steady ahead of New York’s opening at $30.31.

Gold _{(very short-term)}

The gold price should continue stronger today in New York.

Silver _{(very short-term)}

The silver price should continue stronger in New York, today.

Price Drivers

As Shakespeare so eloquently put it, “A rose by any other name, smells just as sweet.” The delay in advancing the next tranche of bailout money until November does mean that either Europe is wrangling another formula for Greece as it cannot repay its debt and a catastrophic banking crisis is on our doorsteps or we are being prepared for the worst –in a manner that might be able to contain the tsunami-like waves of repercussions through the global banking industry. The recession that the Eurozone now finds itself in to varying degrees is slowing cash flows to all members but dangerously so to the debt distressed ones.   The fall in the euro is reflecting those fears.

For the gold and silver prices, one factor not being highlighted by the media is the fact that the gold and silver prices have risen more than 5% in the last few days while other markets and commodities continue to fall. What does that tell you? It tells us that the deleveraging process has stopped in the precious metals markets! It also tells us that Asia is delighted with the falls and is happy to buy at current prices. It tells you that the safe-haven qualities of precious metals are shining through.

We believe that we’ve moved into a more volatile financial world where nothing is quite the same as 2008, where the ability to weather the storms in the future has diminished as so much of the strength the world had in 2008 has already been used up. We’re looking at this prospective future in the next issues of the Gold Forecaster and the Silver Forecaster where you can get a more complete perspective on gold and silver. Subscribe now!  

Regards,

Julian D.W. Phillips, Gold & Silver Forecasters

-- Posted Tuesday, 4 October 2011 | Digg This Article | Source: GoldSeek.com

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