-- Posted Thursday, 1 December 2011 | | Disqus

After a London afternoon Fixing that was set at $1,746, $42 more than in the morning Asia took the gold price slightly higher ahead of London’s opening to $1,748, before it pulled back to $1,743 just before London opened. Again, the London Fixing continues to dominate the gold price. In the euro, gold stood at €1,294.30 only €5 higher than before the central bank statements.

The Fix came in at $1,750.00 up $46 on yesterday morning and in the euro at €1,298.028 up €16 as the euro recovered to €1: $1.3482 up nearly 2 cents. Ahead of New York’s opening gold stood at $1,747.50 and in the euro at €1,295.64.

The silver price held in Asia at New York’s price of $32.73 up $1.10. Ahead of New York’s opening it moved higher to $33.20 up nearly $2 on yesterday.

Gold _{(very short-term)}

The gold price may well pause in its rise to rebuild its strength in New York today.

Silver _{(very short-term)}

The silver price may well pause in its rise to rebuild its strength in New York today.

Price Drivers

The US Federal Reserve, in conjunction with the European Central Bank, Bank of England, Swiss National Bank, Bank of Japan, and Bank of Canada, lowered the interest rate on their U.S. $ swap facilities by 50 basis points. This almost halves the interest rate charged for borrowing dollars. This is intended to avert a massive ‘credit crunch’, which could have been worse than a Lehman Bros. debacle. We are watching to see if this will persuade European banks to lend to each other as well as into the economy. If it doesn’t, a credit crunch may have been averted but little else.

With such a massive boost to liquidity into the Eurozone from the world’s leading central banks, it looks as though Europe has received a huge dollop of quantitative easing ‘look-alike’. Over time this will weaken the value of the U.S. dollar as well as the euro. Little could be more gold positive! [To get a fuller picture, subscribe through www.GoldForecaster.com or www.SilverForecaster.com to our newsletters on these subjects.]  The December 9^th meeting of European Finance Ministers in, yet another attempt to resolve the Sovereign debt crisis in Europe, will prove another milestone in the crisis. Let’s be clear about this, the only real solution lies in an integration of the 17 nation’s fiscal affairs or in a Eurobond. This means loss of financial sovereignty. If we are not mistaken this is what the wars of the last couple of thousand years in Europe were all about? With the financial firepower displayed so far in Europe, we don’t see that happening. The French and Spanish bond auctions were successful with yields paid slightly less than previously.  The yield on Spain’s five-year bonds fell 22 basis points to 5.64%, with France’s 10-year yield dropping 21 basis points to 3.18%. For sure the events of the last few months and particularly the last day are gold positive!

Regards,

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

-- Posted Thursday, 1 December 2011 | Digg This Article | Source: GoldSeek.com

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