Gold and Silver's Daily Review for 30th August 2010


The week started with gold holding the levels last Friday saw in New York at $1,235.   It was Asia's day as London enjoyed a sunny holiday.   The issue of the day was the meeting of the Bank of Japan where they debated what to do about a Yen strong enough to damage Japanese exports. 

It was agreed that Japan will spend 920 billion yen ($10.8 billion) on economic stimulus and compile an extra budget if needed.   The central bank expanded a loan program by 10 trillion yen ($116 billion).   This left the market underwhelmed and the Yen went stronger still.

This is a red rag to a bull conclusion, inviting speculators to push the Yen even higher, until the B of J takes sufficient action to prevent its rise.   The talk is now that it will rise to Yen 78 against the U.S. Dollar, which will force crisis action on the government.

We are including an article [with the important conclusions for Subscribers] on The Changing Face of Investing – From Capital Growth to Interest/Dividend earning instruments in the current issue of the Gold Forecaster.   We feel it is important for investors to know that these changes are critical to the preservation of their hard won wealth!

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Gold – Very Short-term

With London on holiday and Asia content to follow New York the gold price today will be a pure U.S. play.   It is good to see this because we can then see U.S. views on gold unfettered by other global influences.   They will react to the decision of the B of J.   Initially the impact may be muted, but once digested this is gold positive.

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Silver – Very Short-term

Silver is holding ground at $19.12 and looking strong.   New York will decide what happens today, but, on balance we expect a positive day for silver.

Gold Price Drivers

With the issue today being the Bank of Japan's decision to stimulate the economy and to lower the value of the Yen internationally major steps have been taken that will enhance the attraction of gold globally.   We will discuss these in the next issue of the Gold Forecaster, as there is not sufficient space for it here.

Of equally if not more significant importance is the next step of the Chinese government to internationalize the Yuan.   Both these actions will result in a major shift in values and attitudes not only to the U.S. Dollar, but to the currency markets as a whole.

As we read other commentators on gold and global markets it is clear that few describe the shift of power and wealth internationally.   The fundamentals structural changes that come with these changes will have a deep impact on the gold and silver prices.   We strongly recommend that, to ensure you get the full picture we offer to you, subscribe through: – or to our newsletters.


Julian D.W. Phillips