Gold Today – Gold closed in New York at $1,622.10. London nearly the same at $1,622 and was Fixed at $1,622.75 as the euro remained the same as yesterday at €1: $1.2274. In the euro it was Fixed at €1,323.290 up €5.5 on yesterday morning. Ahead of New York’s opening gold continued rising and was at $1,624.50 in the middle and in the euro at €1,323.21.
Silver Today – Silver in New York closed at $28.20 and continued rising in London to $28.36 ahead of New York’s opening.
Gold (very short-term)
Gold should have a stronger bias, today in New York.
Silver (very short-term)
Silver should have a stronger bias, today in New York.
Price Drivers
Gold & Silver –
Last week we discussed how the gold and silver prices would reach an extremely narrow trading range, rather like a pennant. At this point buyers and sellers are almost in balance. At that point a small rise in either demand or supply can tip the market, strongly in one direction or the other. We are extremely close to that point now. The question is, “which way will gold and silver move now?” [To follow our weekly commentary, please subscribe to our newsletters at www.GoldForecaster.com and www.SilverForecaster.com]
Parallel to that is the market ‘mood’. At certain points markets stop responding to bad news and only respond to good news or vice versa. The ‘mood’ that causes this becomes dominant in a market. It is that, that points the way forward for prices. Where would you say market moods point now?
The fact that the bad news in the U.S. is overshadowed by the Eurozone sovereign debt crisis and that is overshadowed by the Olympics does not alter the state of these crises. All eyes will look to the Fed’s FOMC meeting today to look for signals that more stimulus is on the way. The market ‘mood’ is currently one of fear and uncertainty, so more stimulation will be seen as a trigger for a weaker dollar and a weaker euro. The market will immediately respond to this. More news that the Fed is ‘prepared to stimulate, if necessary’, will see all financial markets move sideways. So the market ‘mood’ wants stimulation. This is therefore the way forward.
Silver – Silver showed the robust state of its market by showing it to be quick off the mark yesterday, as it rose through $28 while the gold price barely moved. In the Silver Trust those investors that were weak holders appear to have closed their positions while those long-term holders have a firm grip on their positions. Trader’s long positions are at an extremely low level as they are in gold. We see that they are also fairly heavily short of precious metals too.
Regards,
Julian D.W. Phillips for the Gold & Silver Forecasters
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