Gold Today – Gold closed in New York at $1,622.2 up$60 and in London’s early morning fell to $1,618.35 as the week began. There is no Fixing in London today or tomorrow due to the Jubilee celebrations. Ahead of New York’s opening gold stood at $1,624.10 and in the euro, €1,305.86 while the euro was at €1: $1.2437. [To follow our weekly commentary, please subscribe to our newsletters at www.GoldForecaster.com and at www.SilverForecaster.com.].
Silver Today - Silver jumped to $28.36 up 60 cents in New York. Ahead of New York’s opening at $28.57.
Silver (very short-term)
Silver may should show a stronger bias, today in New York.
Price Drivers
Gold – Gold did just what we forecast it would do in our ‘Market Alert’ sent to subscribers ahead of the move. The poor U.S. jobs report triggered the move. Traders, who held sway in what has been relatively quiet gold markets in the last few weeks, quickly turned their positions around as it became clear that the global economy is not nearly as healthy as thought. Uncertainty and fear sparked by the prospect of deflation across the globe is turning investors back to gold, which thrives in deflation as well as inflation.
Germany has rejected the concept of a Eurozone-wide bond backed by its strong financial position. The effect of such a bond would be the same as guaranteeing, the weaker members debt. Germany rightly sees this as potentially damaging to them and the Eurozone. Apart from that Angela Merkel’s career would probably be stopped in its tracks at the next election if she backed such bonds. Having said that, Germany, 40% of whose exports come from the other members must be weighing up the value, to Germany, of the weaker members and subsequently deciding to see if they should get support after the ‘bailout fund’ is used up [If Spain asks for a bailout, then the fund will be depleted].
The news may well not have been new news last Friday, but it convinced markets that the way forward is not to a resolution of Eurozone problems but to a breakdown. This is gold positive!
The Indian Rupee price of gold has hit a new record today.
Silver – Silver moved ahead with gold but still has to move further to match the 5% rise in gold. Silver has only moved 2% up since Friday. As more a precious metal of the Americas silver tends to wait for American markets to open before matching gold’s moves fully.
Regards,
Julian D.W. Phillips for the Gold & Silver Forecasters
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