After swinging both ways New York held the gold price at $1,804.70 at the close, then Asia took it down to $1,771 ahead of London’s opening. London then pulled it down to $1,764 ahead of the morning Fix which was set at $1,765.50 and in the euro at €1,310.399 while the euro was trading barely changed at €1: $1.3473. This was more an expression of the fall in the euro than a fall in the gold price.

Thereafter, it moved back to $1,754.05 with the euro again barely moved at $1.3458, leaving the euro gold price at €1,303.35.

Silver opened at $39.75 down nearly a dollar from yesterday’s $40.35, before following gold down to $38.68 and falling further still. Ahead of New York’s opening it stood at $37.86.

Gold _{(very short-term)}

The gold price should be volatile, today in New York.

Silver _{(very short-term)}

The silver price should be volatile, today in New York.

Price Drivers

Today, the fall in the euro is dictating the gold and silver price, which is more a run for cover [taking profits on gold as the Technicals indicate and de-leveraging positions in general as the recession looms]. Take a look at the gold price table below to see the different moves of gold in different currencies.

The announcement of operation “Twist” by the Fed has not been well received by the markets, so far. While it makes it easier for people to buy houses, we are reminded that the last housing ‘bubble’ was caused by extremely low interest rates turning up and turning people out of their houses. The consumer who is the 70% driver of the U.S. economy needs to feel secure in his job and about his income, before he makes very long-term commitments.

What is disappointing about the Fed’s move is that it appears to be one of the last tools available to them, so hopes for recovery stimulation are fading. With the political impasse now set to become more permanent, there is little hope that the government will be able to govern effectively. We look around the world to find hope of rising growth and find almost none, so why should one sell precious metals and invest in other areas, particularly when we realize that the developed world’s monetary system needs growth to find the strength to stop the decay in confidence it is experiencing? Debt levels are breaking confidence even further, as the possibility of a recession grows too.

There is a point, following the example of Asia, when investors in the developed world are going to realize that gold and silver are an alternative to trusting politicians and government promises as described by national banknotes. Central banks outside the developed world are leading the way. [To get a more complete perspective on gold and silver subscribe to the Gold Forecaster and the Silver Forecaster, now!]