Today we are writing this section from the euro gold price point of view to illustrate what’s happening to gold; the gold price continued to pull back as the euro price of gold stood at €1,030.41 ahead of the gold Fix. It has pulled back from €1,041 over the last couple of days and still is far away from its peak at €1,065.

The attention of the gold world was grabbed by the action of a the University of Texas Investment Management Co. that switched their gold investments to bullion and actually took delivery of around 20 tonnes of gold in the form of 6,643 gold bars, worth $987 million.

Gold kept galloping to $1,496 before pulling back to $1,490 then recovering at London’s opening to $1,494.45. The dollar barely moved and held at $1.4241, which in the light of the bad news for both the dollar and the euro was really a statement that they were both falling at the same speed.

While most people look at gold in the dollar we expect to see demand and supply factors overlain by the dollar’s exchange rate movements against the euro. Nevertheless, gold is at record levels now having see a very short and not so sharp correction last week.

Gold held at New York’s closing level of $1,486 in Asia on Monday before slipping slightly in London to fix at $1,484.50. This is somewhat misleading because the dollar recovered to $1.4300 on Monday up from $1.44 on Friday. Hence in the euro gold is slightly stronger at €1,036.81 up from Friday’s p.m. fix of €1,023.81.

The mood of the market in silver is “holding strongly and waiting to move”. In gold it is, “holding steady in the euro, nearly ready to move.”

Both metals have moved as money. Gold and Silver Exchange Traded Funds have attracted massive investments in the developed world where trust in the monetary system is far higher than it is in the emerging world. But it was the underlying gold and silver that attracted investors. Waning confidence in the value of paper currencies gave way to demand for precious metals as a store of value retainers for investors.

The mood of the market is now, “should we jump back in again?” The market is looking up towards $1,500 still, but there is an air of doubt investors look back at a good run.

A new week and a new world for gold and silver!

With the Eurozone crises getting worse this week you may feel that the euro should be falling not the U.S. dollar. The interest hike yesterday of ¼% did the trick.

So frequently today we rely on economically established perceptions that fail time and again, simply because the conditions in which they were established have changed. One of the economic clichés is that exchange rates will rise if interest rates rise.

While the oil price does continue to creep up, this is not the cause of gold and silver’s rise.