Santacruz Silver Mining reports fatality at Tres Amigos mine in Bolivia
Tres Amigos mine, a part of the Caballo Blanco Group of mines, has resumed operations after it was shut down following the incident.
New York cam in yesterday and knocked the gold price down from yesterday morning’s Fix of $1,426 and a euro at $1.3368 to $1,392 and a euro at $1.32. But in the euro that fall was from €1,062 to this morning’s Fix of €1,054.9 an €8 fall. This looks overdone. It also tells us that the Europeans are making the gold price right now.
Traders ensured that the gold price in the euro was arbitraged into the U.S. and adjusted the $ price by $31. To explain, this was not a gold price move due to buying and selling of gold, but an adjustment in dollar terms to compensate for the changing exchange rate. It’s all a matter of who is making the market in gold. At the moment we believe that the U.S. gold market is primarily a spectator with both London and Europe accumulating gold itself.
Meanwhile, the situation for the euro remains uncertain. The European Central Bank keeps supporting Irish and Portuguese bonds, as holders dump them, expecting around a 5 year period before they default. The Finance Ministers have still not come up with a plan to save the euro. Perhaps if the E.C.B. buys enough of the distressed bonds, it will have done the job by itself?
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Gold – Very Short-term
Because we believe that traders took the gold price down in New York, we expect the gold price to recover somewhat while absorbing the news that Ireland appears to have committed itself to accepting the Eurozone rescue package.
Silver – Very Short-term
Silver was knocked back with gold and should now consolidate around the $29 area.
Gold Price Drivers
New York was where the gold price was knocked back from $1,426 to $1,392 a 2.3% fall in a market where there was little evidence of physical selling. As we said above, if traders were responsible in a shorting maneuver then we expect them to be as quick to close positions, so volatility while gold consolidates once more, but likely for a shorter period than before.
In the U.S. the view of a frustrated President angry at the need for political compromise adding another $900 billion to the deficit, shows us that the U.S. government is not really in a position to undertake the fundamental action needed to rectify the U.S. national and fiscal debt. This is how the world outside the U.S. will perceive the current activities of both the Fed and the government. As we said yesterday, “The Fed’s admirable efforts need to be led by a vigorous government set of actions, without which not enough can be achieved.” At Gold Forecaster, we see our task to give you that perspective [subscribe at www.GoldForecaster.com or for silver at www.SilverForecaster.com ].
Regards,
Julian D.W. Phillips
