-- Posted Tuesday, 27 March 2012 | | Disqus

New York closed at $1,692.00 $30 higher. Asia let it slip, ever so slightly to $1,689 and London then set it at $1,694.00, $36 higher at the morning Fix and in the euro at €1,266.542 €11 higher while the euro stood at €1: $1.3375 1.6 cents higher. Ahead of New York’s opening it stood at $1,691.20 and in the euro €1,266.62 while the euro was at €1: $1.3350.

Silver rose to $32.83, up 61 cents or 2%, in New York. London lifted it with gold to $33.08. Ahead of New York’s opening it stood at $33.05.

Gold _{(very short-term)}

Gold will again consolidate with a stronger bias, in New York today.

Silver _{(very short-term)}

Silver will again consolidate with a stronger bias, in New York today.

Price Drivers

Perception makes prices not realities in the very short-term and traders in the developed markets of the world decide the short-term level of prices. In the past we have used an analogy of the seashore to describe this situation. The currents and the tides are the deciding factors on whether there is a flowing or ebb tide and current. But on the seashore itself this is difficult to see except by looking at the waterline. Waves go in and out some further than others irrespective of the direction of the tide. Now add to this the wind, which can whip up the size of the waves and the surf. Add some spray and you can see a furious display by the waves, but they remain under the dominance of the tides, no matter how furious they get. Such is the gold market. The news that Fed Chairman Mr. Ben Bernanke will keep accommodative policies in place to further encourage the recovery sparked the surge in the gold price in New York yesterday, but as we have said many times before, the state of the U.S. economy is not a major fundamental factor in the gold price. It is the state of the U.S. dollar in terms of value and structure that remains the underlying tide in the gold price, together with demand from the emerging world.

In India the jewelers strike is on again as they object to the government’s duty hikes. The recent move to reduce tariff value has been termed an infinitesimal gesture. Over the weekend, the Indian government has reduced the import tariff value of gold by 7.50%. Though the announcement was made through a notification from the Ministry of Finance, the small reduction will not counter the impact of increased customs duty.  [To follow our weekly commentary on the Chinese and Indian gold markets, please subscribe to our newsletters at www.GoldForecaster.com and at www.SilverForecaster.com.] History shows that the government eventually backs off their position because the gold market is far more that just a gold market. It is a fundamental aspect of Indian financial life with strong doses of religion and family thrown in. This means it affects votes. We expect the government to again back track on its position.

Regards,

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

-- Posted Tuesday, 27 March 2012 | Digg This Article | Source: GoldSeek.com

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