Gold Today – Gold closed in New York at $1,600.20 and in London’s early morning fell to $1,591. The Fixing in London today was set at $1,589.25. In the euro it was set at €1,271.40. Ahead of New York’s opening gold stood at $1,590.40 and in the euro, €1,271.15 while the euro was at €1: $1.2511. [To follow our weekly commentary, please subscribe to our newsletters at www.GoldForecaster.com and at www.SilverForecaster.com.].
Silver Today – Silver held at $28.61 in New York before falling back to $28.50 in London’s morning. Ahead of New York’s opening at $28.49.
Silver (very short-term)
Silver may well show a positive bias, today in New York.
Price Drivers
Gold – After the euphoria of the Spanish mini-bailout for their banks the markets looked past the politician’s spin at the ongoing realities of the Eurozone and pulled down the Spanish bond prices and raised their yield to 6.5% again and this time took Italy’s bond yields above 6% too. The two leading Spanish banks were downgraded too after the news.
Then Cyprus came to the surface as being about to ask for a bailout of their banks. Although very small it is very clear that the Eurozone crisis is now a full blown E.U. and euro crisis. With Italy facing contagion prices on its bonds and its politicians waiting for a much greater crisis before they do something effective, the future of the euro and the Eurozone looks bleak. Yes, it will drag on and on, without a clear resolution. Germany’s demand for monetary, fiscal and political union means that the crisis will hurtle on until we see a structural crisis that will cause a significant flight of capital from the E.U. and consequent damage to developed world financial markets.
The key question then becomes, “Will the gold and silver prices complete their breakaway from the moves of the euro as they did last week and reflect a loss of confidence in currencies per se?” We believe that they will!
Silver – Silver like gold is holding its ground to some extent, but so, at the moment is the euro, but for how long. Silver prices are facing higher risks as the E.U. crisis moves to critical levels. Ultimately the crisis is extremely positive for silver prices. We expect that silver prices will continue to reflect the monetary qualities of gold as it continues to move in tandem with gold.
Regards,
Julian D.W. Phillips for the Gold & Silver Forecasters
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