China stainless steel mogul fights to avoid a second collapse
A debt crisis is threatening the future of one of the world’s top stainless steel producers, Jiangsu Delong Nickel Industry.
As relief courses through the Eurozone government bond markets at the success of Portugal’s, Spain’s and Italy’s government bond auction, the sharp edge of the crisis appears to go away, for now at least. This saw gold in euros, at the Fix drop to €1,023. Its peak was €1,065. In the dollar its Fix of $1,369 did not seem as sharp as the euro rose to $1.3364 in London. This relief may last a little longer, until reality kicks in again and all see that Europe is nowhere near to being ‘out of the woods’ yet.
Across the Atlantic, Moody’s is chiding the U.S. and saying the immaculate credit rating of the U.S. is under threat unless the U.S. stops increasing its borrowing. We do not expect any market reaction from this as it may take years to mature still.
Gold was Fixed in London at $1,69.25 and €1,023.66 down from yesterday mornings $1,380.75 and €1,050.24. That’s a 2.5% fall on the day.
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Gold – Very Short-term
Gold could continue to show weakness in New York today, after the sharp fall in London today.
Silver – Very Short-term
Silver could continue to show weakness in New York today, after the sharp fall in London today.
Gold Price Drivers
As you head off into your well-deserved weekend, here’s some food for thought. Imagine a time when China does reach its full potential. Where will the U.S. and Europe stand? Imagine the world’s joint but leading global reserve currency is the Yuan. Imagine Chinese goods from top quality to the cheapest items all having ‘made in China’ stickers on them. Imagine schools teaching Mandarin as a second language at school. What price in Yuan will the gold and silver prices be? It’s a whole lot to get your mind round isn’t it? But can you see any reasons why this should not happen? If you can’t, what are you doing to prepare yourself for it? Many leading industrialists are sending their children to China to finish their education and learn the language.
What we do know for sure is that China may well have the second if not the largest gold and silver markets in the world then. If you subscribe to the Gold Forecaster you will be able to read our piece on, “The coming flood of Yuan and Chinese Gold Demand”.
We don’t like change that much but you can be absolutely sure that we are moving into a period of change in our daily lives that will be faster than anything we have seen in the last century.
We are also issuing a series on “The Financial Earthquake” that lies ahead in the years to come, in our newsletters. We suggest you subscribe to the Gold Forecaster and Silver Forecaster where you can read these. It is there that we will we will detail all the factors that will join to jeopardize the global economic landscape in 2011, keep you in touch with their progress and give you our forecasts for 2011.
