Gold and Silver's Daily Review for 17th Sept 2010


With tremendous force, Asia took the gold price to the new record high of $1,280.   London came in and added more to that level to ensure the gold price was Fixed at $1,281.50 in the morning.

This may well prove unbearable to so many short position holders eyeing $1,300 right now.   Ahead of New York the gold price hovered at this high waiting for New York to open.   Short position holders must be very nervous holders by now.

With both the Swiss and the Japanese trying to weaken their currencies against the Dollar it is becoming difficult to see relative weakness.   Against the Pound and the Euro the dollar is weakening heavily.   This seems to make their argument against intentional holding a currency down a little thin.      Currency waters are getting unpredictable alongside global price stability.   The storm is brewing in these markets.   The U.S. is becoming more aggressive in their stance in the face of China.   If confrontation looms up over the currency issues, turbulence and volatility will erupt in the foreign exchange markets for sure.   Gold will benefit.

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We are developing the theme of the last article [Subscribers can access our archives] on "Developed World Demand & Supply of Gold" in the current issue of the Gold Forecaster, and writing "Will the Chinese Yuan rise – what of Chinese Gold Investors?" and "Will the Silver price de-couple from Gold" These will not be issued in full as short articles, if at all, to gold sites in general.   To read these important pieces and to find out our preferences and for our full range of weekly forecasts please subscribe through: – or for our weekly newsletters.

Gold – Very Short-term

Having absorbed the breakout, gold started to spring in Asia.   We see no reason why that should not continue today in New York.   Short position holders, those waiting for a pullback and the like are reassessing their positions very carefully now ahead of what again may be a frantic Friday.   We expect a positive day for gold.

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Silver – Very Short-term

Before even London opened silver hit $21.   Silver was fixed at $20.85.   We expect a positive day for silver again.

Gold Price Drivers

Inside the U.S. the anger against China's low Yuan exchange rates is understandable, because it means loss of jobs there.   Outside China the weakness of the U.S. Dollar over the last few years has hurt foreign investors.

Japan, the U.S., the Swiss, Canada, et al, all want lower exchange rates for their currencies in their national interests.   Rising exchange rates hurt exporters.   But we have to understand that nobody really cares about the global economy except where they benefit from it.   Nations care about their own people only.   Hence, there are no principles that govern exchange rates.  Essentially the Eurozone has 'fixed' the exchange rate by having the one currency and there the strains were made clearly apparent.   Until the global currency system is reformed to accommodate a stable global economy, we will see serious currency crises.   This is gold positive!


Julian D.W. Phillips