-- Posted Wednesday, 12 October 2011 | | Disqus

After New York closed at $1,659.70 Asia took the gold price higher to $1,674 ahead of London’s opening with the euro at €1: $1.3654 and gold in the euro at €1,226.01.  It then climbed with the euro [€1: $1.3742] to $1,679.30 ahead of the Fix. Gold then Fixed at $1,687.00 and in the euro slightly lower than yesterday’s €1,222.98 at €1,222.021 while the euro stood at €1: $1.3803. Later in London’s morning and ahead of New York’s opening, gold slipped slightly to $1,683.55 and in the euro to €1,222.80 while the euro was at €1: $1.3768.

The silver price started the day at over $32.30 up 65 cents on yesterday, before rising a dollar, to $32.95 ahead of New York’s opening.

Gold _{(very short-term)}

The gold price should have a stronger bias, today in New York.

Silver _{(very short-term)}

The silver price should have a stronger bias, in New York, today.

Price Drivers

Again the Eurozone debt crisis is on the minds of financial markets. Now we hear from the outgoing European Central Bank head, Claude Trichet that, “The crisis has reached a systemic dimension. Sovereign stress has moved from smaller economies to some of the larger countries. The crisis is systemic and must be tackled decisively.” Are the politicians listening? What we are hearing now is that the resolution has to be massive enough to lift the banking crisis out from unacceptable Balance Sheets throughout Europe as well as achieve such a rescue of the PIIGS countries that the markets will be calmed and restore confidence in the Eurozone, by the end of October. So far the markets are happy to go along with that hope as we see in the euro rising to €1: $1.38 this morning. The gold price is very steady in the euro, so the dollar price of gold represents a fall in the dollar, not a rise in the gold price!

But the gold price is not rising because of that. The gold price is ‘flooring’ between $1,600 and $1,670. This is prompting Asia to believe that the gold prices will not fall below $1,600 making current entry prices a buying opportunity. The gold price to the huge Indian market is in Rupees, which has weakened to Rs.49 to $1 from Rs.45 to $1 recently. This 10% drop equates to $160 on the gold price or 10%. And still Indian buyers remain enthused by current prices ahead of the Diwali festival on October 26^th.

While traders can drive prices both ways easily, the weight of physical demand wins out in time. The last few days has seen the London Fix increasingly dominate the gold price. This tells us that we are watching physical demand win out in the consolidation pattern we are experiencing now. Please subscribe through www.GoldForecaster.com or www.SilverForecaster.com to benefit from our complete views on the gold and silver markets and to benefit from our insight.

This week, in the next issues of our newsletters, we are focusing on the investor and will look at the principles behind the decisions shaping precious metal portfolios.  

Regards,

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

-- Posted Wednesday, 12 October 2011 | Digg This Article | Source: GoldSeek.com

comments powered by Disqus
Previous Articles

© 1995 - 2019

Live GoldSeek Visitor Map | Disclaimer