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.
price should be volatile, today in New York.
silver price should be volatile, today in New York.
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
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!]