-- Posted Monday, 12 December 2011 | | Disqus

New York closed at $1,711.00 from where Asia took it down $20 until London’s opening. London took it down to $1,680. Then it was Fixed at $1,680.00 and in the euro at Fixed at €1,266.491 while the euro stood at€1: $1.3265. Ahead of New York’s opening gold slipped through into the $1,670 area with the euro at 1€: $1.3265 leaving the gold price in the euro at €1,266.49.

The silver price opened at $31.43 down 30 cents on Friday in line with the gold price move. It recovered with gold to $32.00 ahead of New York’s opening.

Gold _{(very short-term)}

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

Silver _{(very short-term)}

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

Price Drivers

The euro has weakened again this morning, telling us that the markets continue to be unimpressed with E.U. leader’s efforts to resolve their crisis. With the E.C.B. ‘nearly’ being empowered to buy distressed member’s bonds [Draghi made a condition before he went that way to see fiscal accord in the E.U.], the printing presses are moving into action in the Eurozone. We feel that it the nation’s whose bonds will be bought, will lose considerable value, hence this will lead to QE but with little prospect of the bonds recovering value. With so little resolved by E.U. the crisis is set to stumble on.

Italy succeeded in selling €7 billion ($9.3 billion) of one-year bills, the maximum for the auction, The Italian Treasury sold the bills to yield 5.952%, down from 6.087% at the last auction on Nov. 10. Demand was 1.92 times the amount on offer, compared with 1.99 times last month. While encouraging rates this high are close to unsustainable, confirming Italy is still in crisis.

Falling E.C.B. rates through 1% are also contributing to the fall in the euro against the dollar. Bear in mind that price are not really telling us what’s going on. The ‘big’ picture says that last weeks meeting delivered some good intentions, again, but insufficient results. For Germanic discipline to be imposed on the other members, we believe will reinforce E.U. failure in time. In the near term the growing banking crisis will weaken the euro and while heavy lending of gold persists, we wait to see what forces will pick up the golden baton. We produced an article on why banks [which could include some central banks supplies] are leasing gold. This may be a significant monetary event for gold and could point to some central bank’s promoting the operation. [Subscribe through www.GoldForecaster.com or www.SilverForecaster.com to our newsletters on these subjects.] 

Regards, 

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

-- Posted Monday, 12 December 2011 | Digg This Article | Source: GoldSeek.com

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