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

goldforcaster2As the dollar continued to fall through $1.4 to the euro and is now aiming to go over $1.41 other currencies and precious metals are reflecting that fall.   The gold price in Asia and London today raced up to $1,380 and silver to $24.50.   This is another 1.5%, but it feels more in dollar terms.   It has hardly moved from yesterday's €980 level highlighting that this is all about the U.S. dollar.

By the lack of buying of gold Exchange Traded Funds, particularly in the States, dollar investors appear confused at the gold's dollar price rise.   We are not far off from the time when you will not ask what the gold price is in dollars, but what the dollar's price is in gold.   Just look at the fall in the dollar in the Yen, Pound, Swiss Franc and you see that gold is hardly moving in those currencies.   We believe the dollar has a way to fall still.

Apart from covering the gold 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].   It is vital to understand these subjects so as to be able to profit from the behavior of the gold, silver and platinum prices.   We suggest you subscribe through:   www.GoldForecaster.com and www.SilverForecaster.com

Gold – Very Short-term

Gold should continue remain positive in New York today.

Silver – Very Short-term

Silver should continue to behave positively event though it has jumped a dollar to $24.5.

Gold Price Drivers

It is hard to adjust an attitude established over forty years.   In that time, the U.S. dollar has been the unquestioned measure of the value of everything, including precious metals.   Then at the turn of the century, its reliability came into question as the Euro was born.   At that time they were on par, one for one.   Now, as the euro rises and the dollar falls towards $1.50 and maybe more, the dollars reliability is under fire.   This change is seen in the world's foreign exchanges and is due to the potential rise the sheer volume of dollars in the States.  These are flooding out into other currencies forcing them up and the dollar down.   While this continues any assets as well as currencies and in particular precious metals are going to rise in dollar terms.

We have written about these in the next issue of the Gold Forecaster.   Subscribe if you wish to understand these facets of the gold market.

Regards,

Julian D.W. Phillips