Gold and Silver's Daily Review for 14th December 2010

gold-forecaster2Today, all await the no-confidence vote in Italy.   Berlusconi himself tells us all that if he is ousted Italy will join the list of nations of EU nations needing a bailout.   The story of Italian governments of the last 55 years reads like a novel.   It seems that many don't think it will throw Italy into that unfortunate barrel, but added to the fears the EU faces right now, we do feel that if he is ousted, the EU will revert to immediate crisis mode.   Meanwhile gold rose in Asia yet again as the greater fear lies in the state of the U.S. dollar.   It is becoming apparent across the world that politics and finances do not mix well.   Politicians just don't seem to be able to join gaining votes with sound finance.   So long as this persists under the weight of excessive borrowing in the world's major nations, gold will act as a better place to be than currencies.

Meanwhile gold mounted $1,400 again Fixing at $1,405 in London this morning.   If you really want to understand the gold market, you have to understand the monetary system of the world.   To just look at the charts in isolation or to look at gold as a commodity will leave you facing ongoing surprises.   No, you need more. Apart from covering the gold and silver markets Gold Forecaster and Silver Forecaster are structured in a way that addresses macro-economic factors from oil to currencies covering the pertinent gold markets that directly affect the gold price and some that simply influence it.   It is a "must-read" for all who want to understand why the gold price is moving as it is and why.   It also aims to help you understand why currencies and today's national economic problems are influencing the global economy and the precious metal prices [we cover platinum in the Silver Forecaster too].   Subscribe at or for silver at].

Gold – Very Short-term

Gold showed its strength in Asia as it topped the $1,400 mark again.   While robust, it is still in consolidation mode.   Gold could rise more today but equally it could slip in New York.   We expect an indecisive day in New York.

silverbarsSilver – Very Short-term

Remarkably silver is sitting at $29.78 having Fixed at $29.88 in London today.   While the price could dip, we could see a continuation of a 'short squeeze' pushing the price over $30 again.   While expecting silver to remain robust, we could see an indecisive day in New York.

Gold Price Drivers

Asian demand from India and from Chine continues to drive precious metal prices up.   Any gold E.T.F. sales of gold are being snapped up in London, but whether by Asia or the central banks is hard to tell.   We do know that both are steadily buying gold.

Uncertainty in the world's currencies continues to be fueled by political dramas.   Italy may come to the fore on this stage today.   But the fact that the world's leading currency, the dollar has a worse debt situation than any EU nation is a fundamental reason why gold and silver investments are being favored.

To get perspective on just how well gold has performed in this century, gold has moved from $275 to the recent high of $1,426 a multiple of 5.19 times.   Silver's rise is greater than this.   The shape of the market tells us that this is not a market that is going to retreat back to anywhere near $300, but implies that gold is finding a level it would have achieved had the central banks of the world not 'turned' on gold in the mid seventies to the end of the century.   This is a re-rating of a market!


Julian D.W. Phillips