Gold and Silver's Daily Review for 6th August 2010

The battle of $1,200 is intense.   The 3rd August saw a London Gold Fix was at $1,194.50.   The 4th August saw a Fix of $1,199.50 and on the 5th August in the morning it was set at $1,195.50, the afternoon at $1,192.5.  

After hours it moved back up through Asia to start today at $1,195 moving up to $1,197 just before London opened.   Today's morning Fix was set at $1,194.50.  Look forward to a frantic Friday in New York particularly as the job losses are twice as bad as expected at 131,000 jobs lost.

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Gold – Very Short-term

Today may well see a resolution of the consolidation at just below $1,200.   Moves from here on will be large, once the break [either way] happens.   New York could see a lively market!

Good quality investors are buying below $1,200 not traders.

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Silver – Very Short-term

Silver remains resolute at $18.40.

is down at $18.35 at the Fix in London and is holding ground just above $18.30   We don't expect much of a move in the price today.

Gold Price Drivers

The type of gold buyer is important to the price of gold.   Traders are capricious snipping off profits quickly after buying.   When they take a price up or down, they are like froth on waves crashing onto the shore.   Large longer-term investors are the tide that drives the sea one way or the other. At the moment, funds are buyers below $1,200.  It is New York that pushes the price down.   COMEX is a trader based market and influences the gold price, despite its being a money market only.   Peripheral gold vaults do what little gold buying or selling that there is.

Today the market will be moved by the awful jobless numbers reported today.   They will be taken as a statement of the state of the economy and leave it likely to turn down again.   In turn this will point the way for the Fed to move on more easing of the money supply and undermine confidence in the U.S. Dollar.   A break below 80 on the Dollar Index is now awaited.   Irrespective of today's gold price moves, this is positive for gold.

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Julian D.W. Phillips