Gold Today –New York closed down at $1,770 up $4. Asia held it there over the weekend. Ahead of the Fixing it stood at $1,769.12. The euro remained strong, up nearly half a cent at $1.3111. The gold price was Fixed at $1,767.25 and in the euro at €1,349.355 down €10. Ahead of New York’s opening gold stood at $1,769.75 and in the euro at €1,349.77.
Silver Today – Silver slipped slightly over the weekend to $34.47. Ahead of New York’s opening it stood at $34.51.
Gold (very short-term)
Gold should show a stronger bias, today in New York.
Silver (very short-term)
Silver should show a stronger bias, today in New York.
Price Drivers
Gold & Silver – The markets have been digesting last week’s news of QE3 after their initial enthusiasm, pausing in the process. While this is to be expected, we do not feel that the markets have really discounted the full impact of QE3. This could take a few weeks still. One has to remember that while QE1 and QE2 had very little impact on growth they did have a distinct impact on available money to bankers. While this money did not go where the Fed wanted it to it may well do so now. With bank balance sheets well capitalized additional money can now flow to the housing market and to hiring. That is of course if all concerned are not put off by the year-end, “Fiscal Cliff”? Meanwhile, the biggest factor affecting gold is that the new money does weaken the dollar’s value, so all currencies will fall against the gold and silver price, yet again. That’s what we’ve begun to see now. [To follow our weekly commentary, please subscribe to our newsletters at www.GoldForecaster.com and www.SilverForecaster.com]
The market talk is now that Spain is on the brink of asking for a bailout, despite their denials. Spain only has three options. Firstly it can default and become like a bomb exploding in a crowded public place [the Eurozone]. Secondly, it can ask for a bailout and accept the terms dictated to it by its E.U. creditors. Thirdly, it can walk out of the Eurozone and return to the Peseta and impose Exchange Controls before too much of the capital in the country has fled? Which one will they choose? Rajoy has emphatically said Spain will not accept a bailout that requires Pension cuts. The Eurozone crisis is back to brinkmanship. Meanwhile, the euro remains strong and the U.S. $ weak, for the moment. Gold and silver should continue to move separately from the dollar.
Silver – Silver is pausing after a good run and remains robust..
Regards,
Julian D.W. Phillips for the Gold & Silver Forecasters
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