Gold and Silver's Daily Review for June 24th June 2010


"The consolidation continues as gold sits in the lower area of its trading range after moving down to $1,239 before moving up to $1,244 ahead of New York's open and after a gold Fix of $1,243 where there were four buying banks and only one selling bank.New York opened with downward pressure on the gold price Silver is struggling to hold gold at $18.30."

Gold – Very Short-term

Gold is teetering on support after this mornings Fix of $1,233.25.   If this doesn't hold expect the gold price to pull back to previous support.   The mood of the retail and large private market is undecided as to whether they should continue buying or hold back.   Likewise central banks want good offers and are happy to let prices pullback.   So expect a quiet to weak day, today.

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Silver – Very Short-term

Silver will also have a quiet day unless the gold price dips.   Should gold dip, then silver may well drop back even sharper than the 40 cents it has fallen already.

We will be addressing the issue of "Is Silver de-coupling from gold" shortly, in the Silver Forecaster newsletter.

Gold Price Drivers

Traders on COMEX react to the day's news not to longer term events.   Large private buyers in the gold E.T.F.'s wait for positive gold news before moving into the gold market as buyers.   Today there is no news that will incite them into the market as buyers, so they are expected to stand back and wait for lower prices.   Traders may well then attempt to drive prices lower at the open of New York.

This market is susceptible to more gold-positive, macro-economic news which can overwhelm markets in a heartbeat, despite our expectations of a weaker gold and silver market today.

In a world where there is little confidence in the financial system's attempts to resolve long-term and structural problems fear makes markets mercurial.   Volatility is always high in these times.   There is more and more news coming at us to suggest that developed world growth will be very low for some time to come.   Should these local waves combine to form a tsunami and they are likely to do so in this integrated world of ours, then the impact will precipitate further major problems and support the evolution of gold back into the monetary system.   That's why uncertainty is so prevalent.


Julian D.W. Phillips