Gold and Silver's Daily Review for 16th November 2010


The gold market is so diverse geographically that we must sometimes step back and look at the overall picture. We read reports saying that gold fell because jobless numbers improved, but there are few Indian or Chinese buyers that would go into the market for gold on that basis, if any. 

We have to discern the differences between minor short-term factors that may affect the gold price and underlying persistent forces that will dictate the level of gold demand over the long term. For instance, the cessation of I.M.F. gold sales will reduce supply significantly, whereas a small weakness in the U.S. dollar against the euro will be sufficient for short-term traders to take a short-term position. But it is the sum total of the influences on gold that will dictate the price of gold over time.

What is becoming very apparent is the woes affecting Europe and the U.S. are persistent and their solution out of reach of politicians and central banks to resolve.   That's why central banks are holders or buyers of gold.   And yet the exchange rates this week are relatively stable and the gold price not moving.   However, the resurgence of Eurozone Sovereign debt problems threatens to disturb the current calm we see today when the gold price is now at $1,357 after a Fix of $1,363.25.

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].   We suggest you subscribe through: and

Gold – Very Short-term

Gold should continue to consolidate with the emphasis on the upside in New York today.

Silver – Very Short-term

Silver should continue to consolidate with the emphasis on the upside in New York today. Price Drivers

Today the Eurozone Sovereign debt crisis threatens to suppurate again.   Germany is worried about the euro and wants to help Ireland so that fears don't become contagious in the Zone again.   Portugal is a sitting duck should this happen.   Greece needs longer to repay than it did before.   If push comes to shove Germany will want these countries out of the Eurozone rather than exiting it itself.   If Germany left it would have to start with a currency essentially revalued by 40% stronger than the euro and lose competitiveness itself, so it will stay in.   Kicking the weaker ones out would hold the Eurozone together and cheapen holidays and holiday property, but sacrifice these economies.

Meanwhile, the U.S. has problems of its own with no room to help the global economy.

Said the man who fell off the fifty-storey building, as he passed the twelfth floor, "So far, so good".   Gold will watch from the top floor.,

Julian D.W. Phillips