Gold & Silver Market Morning, January 09, 2012

Asia saw the gold price drift down to $1,608 before it pulled it up to $1,622 as London opened. This was a vigorous start to the week. The euro did not fare as well, falling back to €1: $1.2764, but better than its start at €1: $1.2695. The gold price Fixed at less than market at $1,618.00 and in the euro at €1,266.536 when the euro stood at €1: $1.2775. Ahead of New York’s opening the gold price slipped slightly to $1,617.00 again notably higher in the euro, with the euro at €1: $1.2756 leaving gold in the euro at €1,267.64.

Silver continued its steady if uneventful path at $29.15 slightly down on Friday. Ahead of New York the silver price fell slightly to $28.89.

Gold _{(very short-term)}

Again, the gold price should have a mixed to better day, in New York today as it battles resistance.

Silver _{(very short-term)}

Again, the silver price should have a mixed to better day, in New York today as it battles resistance.

Price Drivers

With Sarkozy facing a disappointed electorate, despite his sterling efforts and an election in the months to come he is making new efforts to resolve the Eurozone crisis with Angel Merkel. It can only be a few weeks though when his political priorities override his financial ones and he has to face off against Merkel’s toughness. We still cannot see any clear solutions to the pressures the E.U. is facing, but the Eurozone will limp on until a banking crisis forces some action out of politicians. Until then the euro will fall. It is unlikely that gold will slip [except with sharp falls in the euro temporarily] with the euro, as it has already broken the link its to it last week. If this continues expect precious metal market fears to subside.

We are also watching gold’s behavior in New York to see if the pattern of pulling down the price, after the Fixes, will continue. The traders that have done that have begun to pay a heavy price for doing so. If they believe this is not wise, then the downward pressure on the price will abate.

In this week’s issue we will be looking at the financial markets heavy focus on short term moves and why the saying goes, “People don’t buy gold to make money, they buy it because they have money.” [More on this in our weekly newsletters and on our website [So subscribe through www.GoldForecaster.com or www.SilverForecaster.com]   

While the U.S. economy seems to be growing the developed world’s central banks remain worried about deflation. We are of the opinion that despite the heavily ballooning of central bank balance sheets, not enough liquidity, moving at an accelerating pace is in the system. This may well shock the developed world economies this year.

Regards,

Julian D.W. Phillips for the Gold & Silver Forecasters