-- Posted Monday, 16 January 2012 | | Disqus

With gold closing slightly down on Friday at $1,638, Asia lifted the gold price $4 to $1,642. The euro fell to the €1: $1.2667 after the European credit downgrades after business on Friday. Hence, gold in the euro rose again to €1,296.28.

London Fixed the gold price at $1,643.50 and in the euro at €1,298.901. The euro stood at €1: $1.2653 at the time. Ahead of New York’s opening the gold price saw the gold price hold at these levels with the euro trying to inch stronger at €1: $1.2668, with the euro price of gold slipping down to €1,296.97.

Silver resume Friday’s closing level at $29.82 to improve slightly in London’s morning. Ahead of New York’s opening silver stood at $29.95.

Gold _{(very short-term)}

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

After a week in which the relief over lower cost for Spain and Italy on their bond costs led us all to believe there was a turning point in the Eurozone crisis, the downgrades of France and Austria to AA+ from AAA with the risk of further downgrades brought back the harsh reality that the Eurozone debt crisis has a long way to go still. The fall in the euro has been the immediate result and a confirmation of the break in the ‘link’ between the gold price and the euro.  Gold is now holding or moving up in all currencies again.

Greece’s creditors yesterday suspended talks with its government having failed to agree about how much money investors will lose by swapping the nation’s bonds, increasing the risk of the euro-area’s first sovereign default.

While the euro continues to decline and lose confidence, the U.S. dollar is rising unhealthily for the U.S. Treasury market. U.S. Treasuries rose, pushing yields to the lowest levels this year as investors ran for cover to the U.S. dollar. Yields on 10-year notes fell six basis points to 1.87 % on Friday. It can only be hoped that the Fed keeps interest rates very low for a long, long time because when the turn comes the U.S. Treasury market may see a vicious and structurally damaging flight from them. The ripples from interest rates rises will spread throughout the developed world.

There is no doubt that the gold price continues to reflect the doubts investor’s have about the state of the developed world financial system as well as the globally growing demand for gold. The investment mood for gold has improved tremendously in these last few weeks. With Asian demand growing again, today at least, should favor gold and silver.  [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 Monday, 16 January 2012 | Digg This Article | Source: GoldSeek.com

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