-- Posted Thursday, 5 January 2012 | | Disqus

Asia held the gold price at the high seen in New York yesterday taking it to $1,616. At the opening London took it to $1,620 before it began to slip with the euro to $1,615.75. The euro looked weaker early in London’s morning then continued to slip to €1: $1.2875 leaving gold in the euro at €1,254.95. The a.m. Fixing this morning was at $1,614.50 and in the euro at €1,256.322. Ahead of New York’s opening the gold price slipped to $1,605 with the euro at €1: $1.2828 almost 2 cents down leaving gold in the euro at €1,251.17.

Silver was unchanged at the open in London at $29.44 steady and unmoved by the better tone in the gold market. Ahead of New York the silver price fell again to $28.95 down a dollar.

Gold _{(very short-term)}

Again, the gold price should have a mixed to better day, in New York today.

Silver _{(very short-term)}

Again, the silver price should have a mixed to better day, in New York today.

Price Drivers

All eyes are on the individual members of the Eurozone today. The efforts of raising funds by those debt distressed members are proving much more successful than expected allowing the euro: dollar exchange rate to improve slightly. The dollar swaps that the E.C.B. took from the Fed have allowed the banks sufficient liquidity to buy their bonds and benefit from the interest rate differentials available on them.  This is a temporary solution, one borne of difficulties and not one that has improved the lot of the Eurozone itself. The debt sales are being done at much lower yields but the euro is slipping. Meanwhile, the new head of Greece is warning of collapse unless more cuts are made! What is significant today is that the gold price is rising while the euro is falling! We are watching to see if this is a trend change.

We expect that at least for the first quarter of 2012 the Eurozone debt crisis will be the focal point of the financial media. And not unreasonably so! The cultural differences between the German attitude to resolving problems and financial problems will continue to barge into the Mediterranean viewpoint. The Mediterranean economies sprang out of Tourism and during their growth were Tourism dependent [except for Italy]. Unlike Germany they can’t make adjustments and then race forward. Austerity measures will reduce the size of their economies and not simply adjust them. Also, they don’t have the same work ethic in general. They don’t have the same economic choices or capabilities, so they can’t follow the same road. 2012 will see these differences come to a head in a far more dramatic way than we saw in 2011.  [More on this in our weekly newsletters and on our website [So subscribe through www.GoldForecaster.com or www.SilverForecaster.com]   

Regards,

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

-- Posted Thursday, 5 January 2012 | Digg This Article | Source: GoldSeek.com

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