-- Posted Thursday, 13 October 2011 | | Disqus

New York closed at $1,680.70 then Asia took the gold price down to $1,670 and €1,211. As London woke up, the price gently climbed back in both the dollar and the euro [$1,675.35 and €1,217.82] ahead of the Fix. This week we are seeing the euro price of gold at the London Fix dominate the gold market. Gold then Fixed at $1,673.00 and in the euro slightly lower than yesterday’s €1,218.056 while the euro stood at €1: $1.3735. Later in London’s morning and ahead of New York’s opening, gold slipped slightly to $1,666.75 and in the euro to €1,214.48 while the euro was at €1: $1.3724.

The silver price started the day at over $32.42 barely changed on yesterday’s opening, before slipping slightly to $31.95 ahead of New York’s opening.

Gold _{(very short-term)}

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

Silver _{(very short-term)}

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

Price Drivers

When government finances and the banking system itself come under threat, the heart and the main veins and arteries of the global financial body come under threat. Financial markets are the capillaries of that financial body. No matter how beautiful a company may look to a potential investor that company is also under threat and carries rising risks. This is a structural change that investors must recognize.

Developed world investors are puzzled at the failure of gold and silver shares to perform as well as gold and silver themselves. In the developed world, investors focus on dollar profits. In the developed world investors, both private and institutional, are focused more on corporate investments, because of leverage and 'income' than they are on the metal itself, usually. It’s a sort of cultural thing that goes with sophistication in investor approach.

But the downside risks to the economy will have a more direct bearing on corporations than on precious metals. In an industry that has traditionally paid over very little by way of dividends to investors, these bloated risks have made the potential shareholder rewards that seem to be implied in much higher profits, far less attractive. This is making precious metal mining shares less attractive than the metals themselves. To put it another way –we’ve moved into an investment climate where the rosy future has gone and investments are rated in the cold, harsh reality that this demands. As the saying goes –people don't buy physical gold to make money; they buy gold because they have money. This is a structural change in perceptions between precious metal mining shares and the precious metals themselves. These statements need more clarification than we can give you in this daily report, so we ask you to please subscribe through www.GoldForecaster.com or www.SilverForecaster.com to get the series of reports on this and on how to change your portfolio now to get the best out of the gold and silver market.

Regards,

Julian D.W. Phillips, Gold & Silver Forecasters

-- Posted Thursday, 13 October 2011 | Digg This Article | Source: GoldSeek.com

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