-- Posted Tuesday, 1 November 2011 | | Disqus
Asia held the gold price steady at $1,718 overnight and the €: $ strengthened a cent to €1: $1.3806 leaving gold in the euro higher at €1,244.39. During London’s morning the euro fell another cent against the dollar until it Fixed at $1,702.00 and in the euro at €1,243.062 while the euro stood at €1: $1.3692. Ahead of the opening of New York, the gold price fell slightly to $1,701.40 while the euro climbed ever so slightly to $1.3696. As you can see gold rose in the euro while it fell in the dollar.
The silver price in Asia stood at $34.4 very steady again in Asia before London opened, again following gold down. Thereafter it slipped to $33.36, ahead of New York’s opening.
Gold (very short-term)
The gold price should be steady to weaker, today in New York.
Silver (very short-term)
The silver price should have a steady to weaker bias, in New York, today.
Price Drivers
Well, you think progress has been made, and then the papaya hits the fan. The Greek Prime Minister wants a public referendum on the bailout package. Recent indications are that the Greek public is negative on the issue to 60% of the voters. The politician is looking for support, but this is a test of the system. Dare we say it democracy is the rule of the lowest common denominator, which is going to be asked for a ruling on a complex financial deal. That’s why the euro fell against the dollar and gold, while gold fell in the dollar. This is not about the gold price but about currencies!
If the referendum throws up a ‘No’, Greece would declare bankruptcy and default immediately. Then it would be back to the Drachma and a two tier one, one for financial transactions and one for commercial ones. This could even bring back volatility and uncertainty to global markets and possibly erase all the efforts made by the E.U. to make a deal. Greece is due to receive an €8 billion tranche in mid-November, but that is likely to run out during January, around the time of the referendum, leaving the government with no funds if there was a 'no' vote.
More dramatically, the banking system may face a contagion that will bring new meaning to the words, ‘domino effect’. This will engulf the developed world’s banking system. Finance and politics do not make good bedfellows it seems!
As for gold and silver, because they are a different species of money they will be immune to the disease. They come with no obligations, no national economic values and stand well away from politicians. That’s why at the end of the day, both politicians and bankers will learn to love the precious metals?
We look at those factors and more on an ongoing basis in our newsletters, so we ask you to please subscribe through www.GoldForecaster.com or www.SilverForecaster.com.
Regards,
Julian D.W. Phillips for the Gold & Silver Forecasters
Global Gold Price (1 ounce) |
| Today | 1 day ago |
Franc | Sf1,513.74 | Sf1,498.77 |
US | $1,701.40 | $1,721.10 |
EU | 1,242.46 | €1,228.31 |
India | Rs.83,887.53 | Rs.83,825.31 |
-- Posted Tuesday, 1 November 2011 | Digg This Article
| Source: GoldSeek.com
