New York closed with gold at $1,542 and in the euro to €1,072 with the dollar at €1: $1.4381.  Then as London opened we saw gold begin to rise slowly and the dollar fall to $1.4472.  Gold was then Fixed at $1,540.75 and at €1,068.26 at the time when the dollar stood at €1: $1.4470.   Again we point to the weakness of the dollar at a time when the Eurozone sees its debt crisis worsening.

Just after New York’s opening the gold price was steady at $1,539.15 and in the euro at €1,065.16.   The dollar stood at €1: $1.4450.

Silver fell to Fix in London this morning at $37.22 and held just below that as New York opened.     

Gold - Very Short-term

Gold prices should show a stronger bias today, in New York.   

Silver – Very Short-term

Silver should continue to show a stronger bias today, in New York.   

Silver & Gold Price Drivers

As the dollar weakens in the face of a worsening Eurozone crisis, we note that Greece is soon to get its next tranche of its bailout.   This will happen, not because of what Greece will give in return, but because both the banks and the E.U. cannot afford a default of Greece for their own sake.   Greeks will weigh up what is best for them by weighing the costs and benefits of a default against bowing to the proposals that will be put to them soon by the E.U.   The Greek government will then act in the interests of Greece, not necessarily the E.U. Unless the restructured bailout favors Greece more than a default will; Greece will reject the proposal, at the voter’s behest.   Greece is holding the strongest hand.   This is already weakening the position of the Eurozone and the euro.   So why is the dollar weaker?

The structural shape of the U.S. favors a weakening dollar on foreign exchanges.   A U.S. moving back to recession will favor more, cheaper imports more than it will gain exports.   The rising deficit and debt ‘ceiling’ crisis is bad for the dollar and for U.S. credibility overseas.  There is a political desire it seems, for a weaker dollar, as that suits U.S. interests more than a strong dollar does.   A combination of these factors will see the dollar fall.   Even without a double-dip recession the U.S. is moving to very troubled waters.   ‘Stagflation’ looks to be the most likely next condition in the U.S. as energy and food inflation continue to undermine the U.S. consumer.   Deflation, in the light of recent economic numbers is back on the stage again.   In these conditions, gold and silver become desired investments.   Certainly U.S. Stock Exchanges are warning of a further downturn and Treasuries are rising for the same reasons they do ahead of a downturn.   But there are different disturbing prospects for the U.S. Treasury market in the short to medium term.

We cover the implications for gold in macro-economic and currency events in all the issues of the Gold Forecaster and the Silver Forecaster for subscribers.   [The Gold Forecaster and Silver Forecaster are a “must-read” for all who want to understand why the gold and silver prices are moving as they are and why.]    Subscribe at www.GoldForecaster.com  or for silver at www.SilverForecaster.com].   

Gold Prices in different currencies which highlight currency moves [We add the Swiss Franc today]:

Swiss Franc – Today: 1,295.27 ounce of gold. Yesterday:    1,309.61: 1 ounce of gold.

U.S. $             - Today: $1,539.15: 1 ounce of gold. Yesterday:  $1,538.20: 1 ounce of gold.

Euro               - Today: €1,065.16: 1 ounce of gold. Yesterday:  €1,066.90: 1 ounce of gold.

India              –Today: Rs. 68,984.70: 1 ounce of gold. Yesterday: Rs.69,282.78: 1 ounce of gold.

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