Gold and Silver’s Daily Review for 14th July 2010

goldforcaster6“Asia came in stronger overnight and London held the price up to fix at $1,211.75 with three banks buying and two selling.   When early New Yorkers started to deal, the price slipped back initially, before picking up at the open there.  

The trading range is very tight around $1,214 at the moment.   This is against a backdrop of a falling Dollar [against several currencies] and a stabilizing Euro.

The market atmosphere is very uncertain with the Fed minutes telling us that some of their board worrying that the U.S. economy could be moving towards deflation and others not agreeing.   In Europe the E.C.B. says the heavy duty austerity packages will not de-rail growth but few buy that story.   Which way is the developed world headed?

In contrast China’s government seems to have a very effective hand on the wheel, adjusting here and a bit there, to cool the property market where property sales are down 60% in the last quarter and inflation is dropping while growth sits in double figures.   Is it any wonder then that the newly enriched Chinese favor gold so much?

Gold – Very Short-term

Again the consolidation continues so we expect today to see a gold price continuing to move sideways to slightly higher.    However, as the trading range tightens this way, expect a strong move, soon.  For more precise forecasts on a weekly basis subscribe through or].

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Silver – Very Short-term

Silver is robust and following gold, but holding firmly above $18.4 so again today we expect to see it move sideways, to higher.   Be ready for a strong move soon!

Gold Price Drivers

China reports G.D.P. growth holding above 10% and a cooling of the property market and inflation.   Exports are up 44%.   Without wanting to even touch on the politics of any country, the reality of economic government there is one of strong effective control and an almost willing compliance of all sectors of society.

In the developed world such control is hampered by separate interests, a weak hand on the wheel of the economies and slow, often ineffective, economic policies.   It is this reality that is fostering structural change in the world that will impact on the gold price for many more reasons than stated here.   Has there ever been a change of empire that has gone smoothly?

The uncertainty mentioned at the beginning of this review is now critical for the developed world economies.   If the fiscal crises facing this world are mishandled now then there is every likelihood of the monetary system moving out of control.   As it is control over the ever volatile economies is becoming increasingly difficult.   The longer the time taken before economies respond to the right stimuli, the greater the risk of a mercurial response either to the upside or the downside.


Julian D.W. Phillips

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