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


We are moving to a point where it almost doesn't matter what the $: € exchange rate is and the gold price is reflecting this.   This morning Asia moved the gold price 4$ higher than Friday's close in New York as it touched $1,416, but then London pulled it down to Fix at $1,411.50.   As London's midday approached the gold price started to rise taking it back to $1,413 again ahead of New York's opening.

European finance leaders are meeting today to see if they can find ways to fend off the contagion effects of the Sovereign Debt crisis.   The size of the rescue fund may be lifted to accommodate Spain, but at what point is credibility stretched too far?   If Spain comes under pressure to any great extent then we believe that confidence will be lost in the euro.   And that is what it is all about, not what accountants deem acceptable, but what the markets deem acceptable.   But as we wrote in the Friday piece on Chinese gold demand, the demand from not only China [It is called, "The Red Dragon turns Golden" – you can find it in the latest issue – subscribe through:]   but the falls in the supply of gold far outweigh the currency factors on the gold price.

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].

Gold – Very Short-term

Gold is looking robust at $1,413 and could well be neutral to positive for today in New York.   Eurozone events continue to influence New York's gold price.

Silver – Very Short-term

Silver is moving with a vigor that is amazing all of us and now stands at $29.70.   We still believe it will follow gold so we expect a neutral to positive day for silver in New York.

Gold Price Drivers

Asia was strong this morning and we are aware of big buyers waiting for the 'dips' to pick up stock.   Bear in mind that when the I.M.F. announces they have completed their sales that will signal, we believe, an end to central bank selling!

What is also clear is that there is no speculative bubble in the gold price.   It appears that the bulk of investors do not fully understand the impact of gold market forces outside the U.S.A.   At Gold Forecaster, we see our task to give you that perspective [subscribe at the address above].


Julian D.W. Phillips