-- Posted Wednesday, 7 December 2011 | | Disqus
New York closed at $1,730 and Asia held it there ahead of London’s opening. It then held at this level through to the Fix which was set at $1,731 and in the euro at Fixed at €1,289.962 while the euro stood at€1: $1.3419. Ahead of New York’s opening gold started to slip back to $1,726.00 and in the euro at €1,289.12.
The silver price opened at $32.64 in line with gold’s bounce in London. It remained steady at $32.55 ahead of New York’s opening.
Gold (very short-term)
The gold price may well consolidate at current levels in New York today.
Silver (very short-term)
The silver price may well consolidate at current levels in New York today,.
Price Drivers
As the run-up to the E.U. leader’s meeting tomorrow, markets are marking time to see what’s going to happen. Despite ratings agencies warnings on the entire Eurozone and its bailout fund, markets in general have decided that the meetings and decisions made there will be successful and the way forward will keep the E.U., together, or if one or more countries eventually are ejected, the remaining Eurozone will be stronger and the euro more soundly based. Generally analysts believe that this will be positive for gold. Certainly, the desire for ‘all to be well’ is the dominant emotion driving markets today. One hopes they won’t be disappointed, but one is cautious in the light of recent past events.
What is apparent is the slowing of Indian gold demand lately in the face of a weakening Rupee, taking Rupee gold prices to new heights. The Reserve Bank of India has stated it will act to stop the slide, but to what extent remains to be seen. Once Indian gold investors are satisfied that a price level will hold Indian investors will return to the gold market as they always have. Another negative factor hitting gold in the short term has been the lending by developed world banks and institutions of gold to the market. This has been done to raise liquidity, or is it an indirect way of capping the gold price? Tight liquidity highlights why the U.S. is so concerned about the E.U. crisis.
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Investors need to discern that gold has slipped on distress selling and restrained demand because of distress, a short-term phenomenon, not a permanent one. Once distress tapers off, the selling stops and the buying begins. We see no reason for this to change in the near and far future. What is clear is that the reasons why gold has risen from 2005 have not changed.
Regards,
Julian D.W. Phillips for the Gold & Silver Forecasters
Global Gold Price (1 ounce) |
| Today | 1 day ago |
Franc | Sf1,600.95 | Sf1,594.16 |
US | $1,726,00 | $1,731.00 |
EU | 1,289.12 | €1,287.47 |
India | Rs.89,009.82 | Rs.89,999.37 |
-- Posted Wednesday, 7 December 2011 | Digg This Article
| Source: GoldSeek.com
