-- Posted Thursday, 12 January 2012 | | Disqus

New York closed at $1,642 but Asia took the gold price a little higher to $1,646 ahead of London’s opening as the euro weakened to €1: $1.2712. London Fixed the gold price at $1,652.50 and in the euro at €1,296.180. The euro stood at €1: $1.2749 at the time. Ahead of New York’s opening the gold price kept feeling upward pressure taking it to $1,655, with the euro at €1: $1.2757 still leaving gold in the euro at €1,297.33.

Silver moved back above $30 to $30.07 before London opened. Ahead of New York’s opening silver it had risen further to $30.50.

Gold _{(very short-term)}

Again, the gold price should have a stronger bias, in New York today.

Silver _{(very short-term)}

Again, the silver price should have a stronger bias, in New York today.

Price Drivers

Spain sold €9.98 billion of bonds maturing in 2015 and 2016, including a new three-year benchmark security, twice the maximum target of €5 billion set for the sale. The yield on the three year stock was 3.384%, compared with 5.187% previously.

Perhaps a more dramatic issue is the appearing unwillingness of bankers to take a voluntary write down of their Greek debt.  They did agree to a 50% write down to avoid complete default but are hesitant to go further. Why should they? After all if they are forced to accept the haircut, they will be paid out in full by credit insurance? It’s bad business at the least [if not insanity] to willingly throw 50% or more of your money away]. Strong E.U. governments are more than unhappy to fill any gap banker’s leave. So the Greek debt crisis is morphing into a government / banking crisis! Watch this space!

The euro continues to slowly weaken with tiny daily rallies and demand for U.S. dollars and Treasuries never higher. The U.S. only had to pay 1.91% for their money. Shows you the measure of fear of the euro, doesn’t it?

Meanwhile Asian demand for gold is picking up again in India as the Rupee strengthened slightly and prices are stable at lower levels, a pre-condition for Indian demand. With the Chinese New Year on the 23^rd January the news that Chinese imports of gold through Hong Kong again reached record levels should not be confused with a seasonal peak. The demand from China reflects the continuing constant growth of gold demand there. It will continue to rise as China develops. The grip the Chinese government has on its economy has again been demonstrated by its taming inflation, now down from 6% to 4.1%. This reassures gold investors that with the rise of the Chinese Middle classes, gold demand will continue to rise. It is as much a cultural trend as it is good sense.

[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, 12 January 2012 | Digg This Article | Source: GoldSeek.com

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