Gold and Silver’s Daily Review for 15th December 2010

gold-forecaster2Berlusconi survived by the skin of his teeth [2 votes], but is not out of the woods by a long way.   Today added two new pressures in the Eurozone debt crisis. Today, Spain’s Aa1 credit rating has been put on review by Moody’s Investors Service and, subject to tomorrow’s auction of Spanish government bonds, may lower it. In Germany Chancellor Merkel has passed the ball for resolving the Eurozone debt crisis to the E.C.B.   Their bond purchasing program though, is only a short-term measure and does not resolve the crisis. No doubt as is common with politicians, the matter must suppurate into a crisis before it is seriously tackled. By that time confidence in the euro may be irrecoverable?

Meanwhile gold slipped at the London morning Fix to $1,388 as it continues to consolidate, calmed slightly by Berlusconi’s survival.   It is now at $1,394 ahead of New York’s opening. Apart from covering the gold and silver markets Gold Forecaster and Silver Forecaster are structured in a way that gives perspective to macro-economic factors from oil to currencies covering the pertinent global 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].   Subscribe at www.GoldForecaster.com or for silver at www.SilverForecaster.com].

Gold – Very Short-term
Gold slipped today ahead of New York’s opening, but we expect it to stabilize at these levels as it continues to consolidate.   We expect a quiet to positive day in New York today.

Silver – Very Short-term
Silver slipped to Fix in London at $29.06 then rose to stand at $29.30 ahead of New York’s opening.   It continues to consolidate around these levels and to follow gold, so we expect a quiet to positive day in New York today.

gold-pourGold Price Drivers
Added to the Eurozone stories that continue to sap confidence in the euro, the news that the Fed will not ease up on its stimuli, QE 2 program and left interest rates alone has allowed the dollar to fall alongside the euro.   We see this with a glance at the Swiss Franc.   Don’t be misled though.   If the Swiss Franc gets too strong, the Swiss National Bank will step in and ‘assist’ the currency lower.   Meanwhile until they do this it serves to tell us what is happening to the dollar and the euro.

Tomorrow’s government bond auction, after the Moody’s told us they were reviewing Spain’s credit rating, will be a focal point for the gold and silver markets.   It is clear that politics demands that crises be solved, not problems.   Financial markets highlight potential crises and need solutions before they are calmed.   The clash of the two will be an ongoing story.   But the major point that needs resolving in Europe for confidence to be regained is that the EU cannot be a financial zone without being a political one.   That’s just not going to happen! And that’s why gold will continue to be favored in Europe.

Regards,

Julian D.W. Phillips