-- Posted Friday, 18 November 2011 | | Disqus
New York closed at $1,718 down over $40 as it broke support down. Asia and London lifted it up to $1,728 before the Fix in London set it at $1,730 and in the euro at €1,279.870 while the euro stood at €1: $1.3517. Ahead of New York’s opening the euro stood at €1: $1.3525, the dollar price of gold at $1,730.50 making the price of gold in the euro €1,279.48. Ahead of New York’s opening the gold price stood at $1,727.45, the euro at €1: $1.3518 and gold in the euro at €1,277.89.
The silver price opened this morning at$32.14 down a dollar on yesterday. Thereafter, it slipped to $31.98 before New York’s opening.
Gold (very short-term)
The gold price should consolidate at these lower levels or weaken again in New York today.
Silver (very short-term)
The silver price should consolidate at these lower levels or weaken again in New York today.
Price Drivers
The last day has seen a mood change coming out of the Eurozone as the crisis runs ahead of European leaders. A growing feeling that the crisis is beyond the capacities there is leading to stress amongst banks, who are now loathe to lend to each other. Talk of another ‘credit crunch’ abounds.
In turn, this has led to financial market sell-offs around the world. What is the greatest threat to the gold price, reappeared yesterday ‘investor meltdown’ is what we’ve called it. The sale of precious metals to cover liquidity shortfalls in other areas then follows. Traders lead the way, when signaled by the charts, pointing to the breakdown of support, driving prices lower, triggering the stop loss sales and causing speculators to respond to margin calls by selling too.
It has happened since 2007 but with the falls proving smaller, shorter-lived, followed by central banks and Asian investors piling in to get the available supply at lower prices.
We are now at another support level, where consolidation may well take place.
The potential to move strongly either way is there and depends on the severity of the coming ‘credit crunch’ and financial market panic. As the World Gold Council has just reported the two main demand sources we mentioned have been supplemented by heavy European investment demand in the last quarter. With the Euro crisis worsening this demand will increase.
The morphing of the crisis from a sovereign debt crisis to a banking crisis is a far larger threat than politicians are responding to. As one Eurozone leader said, “We know what to do, it’s how to get re-elected afterwards that’s the problem.” This is making the problem force the issue, ‘should the Eurozone become a United States of Europe or a bloc of different nations with financial networking?’ Unless politicians get ahead of the crisis, the decision will become academic only. Then the whole monetary system will become a problem.
To get a better perspective than we can give you here, 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 | Sf1,579.15 | Sf1,608.64 |
US | $1,727.45 | $1,751.00 |
EU | 1,277.89 | €1,297.23 |
India | Rs.88,695.92 | Rs.90,895.29 |
-- Posted Friday, 18 November 2011 | Digg This Article
| Source: GoldSeek.com
