We are moving to a point where it almost doesn’t matter what the $: € exchange rate is and the gold price is reflecting this. This morning Asia moved the gold price 4$ higher than Friday’s close in New York as it touched $1,416, but then London pulled it down to Fix at $1,411.50. As London’s midday approached the gold price started to rise taking it back to $1,413 again ahead of New York’s opening.
European finance leaders are meeting today to see if they can find ways to fend off the contagion effects of the Sovereign Debt crisis. The size of the rescue fund may be lifted to accommodate Spain, but at what point is credibility stretched too far? If Spain comes under pressure to any great extent then we believe that confidence will be lost in the euro. And that is what it is all about, not what accountants deem acceptable, but what the markets deem acceptable. But as we wrote in the Friday piece on Chinese gold demand, the demand from not only China [It is called, “The Red Dragon turns Golden” – you can find it in the latest issue – subscribe through: www.GoldForecaster.com] but the falls in the supply of gold far outweigh the currency factors on the gold price.
Apart from covering the gold and silver markets Gold Forecaster and Silver Forecaster are structured in a way that addresses macro-economic factors from oil to currencies covering the pertinent gold markets that directly affect the gold price and some that simply influence it. It is a “must-read” for all who want to understand why the gold price is moving as it is and why. It also aims to help you understand why currencies and today’s national economic problems are influencing the global economy and the precious metal prices [we cover platinum in the Silver Forecaster too].
