Gold Today –New York closed at $1,766.30 up $34. Asia took it to $1,776. The euro jumped nearly a cent and a half to $1.3047. The gold price was Fixed at $1,772.50 up $40 on yesterday morning and in the euro at €1,359.696 up €20 as the rise in the euro took it to $1.3035. Ahead of New York’s opening gold stood at $1,773.00 and in the euro at €1,360.24.
Silver Today – Silver jumped overnight to $34.81 up from $33.21. London lowered it slightly ahead of New York’s opening where it stood at $34.73.
Gold (very short-term)
Gold should consolidate at these levels before showing a stronger bias, today in New York.
Silver (very short-term)
Silver should consolidate at these levels before showing a stronger bias, today in New York.
Price Drivers
Gold & Silver – The markets got more than they expected from the Fed - QE3 for “as long as it takes” and low interest rates for three more years is today’s reality. The stale fear of inflation in the States is now well and truly replaced by a major drive away from deflation and a potential depression. With politicians still emasculated in political gridlock the Fed has called on them to do what they were voted in to do. We don’t think they will, so QE3 ‘for as long as it takes’ is the next best thing. It targets house prices and employment, but will banks follow through?
Translated into gold and silver no news could be better because it undermines the value of the dollar. Gold confirmed this by jumping $40 overnight or 2.3% and silver up $1.6 or 4.8%. Traders and speculators either short of gold or standing on the sidelines drove the prices up. That’s just overnight. What does the longer term hold? [To follow our weekly commentary, please subscribe to our newsletters at www.GoldForecaster.com and www.SilverForecaster.com] It would be naïve to think that this is now the long awaited solution. That must come for Congress and the Senate. They won’t do that for a couple of years more. Meanwhile, for the U.S. to really grow the U.S. consumer must see the value of his house rise and his job secure. That is the acid test. The cost, if that is achievable, will be at the expense of the dollar. Gold [and silver] will rise to reflect that value loss.
In India inflation has now been reported at 7.1% and the gold price in the Rupee is now over Rs.96, 800 for one ounce, without any premium. Initially this will keep Indian investors out of the market, short-term. Bear in mind that the recent break upwards in the gold price has been in the absence of Indian demand. Previously, such a rise would not have happened without Indian demand.
Silver – Silver is outperforming gold as you can see.
Regards,
Julian D.W. Phillips for the Gold & Silver Forecasters
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