Gold & Silver Market Morning

While the London Fixing continues to dominate the gold price, both the U.S. and Asian markets are trying to push the price down. Overnight the gold price stood at $1,710 and in the euro at €1,289 reflecting the price of both the dollar and the euro. The euro fell ahead of London’s opening to €1: $1.3270 down from €1: $1.3366. Then the Fix came in at $1,704.00 and in the euro at €1,282.457 down in the dollar and down in the euro. The price was pushed up to $1,715.70 ahead of New York’s opening and in the euro to €1,289.52 while the euro stood at €1: $1.3305.

The silver price held in Asia at New York’s price of $31.65. Ahead of New York’s opening it stood at $31.44.

Gold _{(very short-term)}

The gold price may well become volatile or see a tightening trading range in New York today.

Silver _{(very short-term)}

The silver price may well become volatile or see a tightening trading range in New York today.

Price Drivers

After listening to the E.U. lawmakers point to a €1 trillion bailout package the announcement of a leveraged [by way of guarantees only] what has emerged is a boosted bailout package of indeterminate size needing the I.M.F. to come in to give it more support. The Europeans are “not there yet” in terms of fleshing out their plan enough for emerging-market nations to pledge funds to the I.M.F. that would then aid the Eurozone. The E.F.S.F.’s [Bailout Fund] capacity will be “very substantial” and will be supplemented by the I.M.F. The ministers “agreed to rapidly explore an increase of the resources of the I.M.F. through bilateral loans. The market remains underwhelmed as the euro slipped a cent against the U.S. dollar overnight.  [To get a fuller picture, subscribe through www.GoldForecaster.com or www.SilverForecaster.com to our newsletters on these subjects.]  

Today, the European Finance Ministers are meeting, for the second day, to look for ways forward. European finance ministers agreed yesterday on terms for two options to expand the capacity of the region's bailout fund. Under the first option, bond holders would get partial risk protection of 20% to 30% backed by the European Financial Stability Facility. Under the second option, one or more so-called co-investment funds would be created allowing for the combination of public and private funding to buy bonds on the primary and secondary markets. Both options are expected to be ready to use by early 2012. Meanwhile, Britain's regulator, the Financial Services Authority, has told Britain's banks to draw up contingency plans in case there is a disorderly break-up of the euro zone or exit of some countries. This virtually guarantees that Capital Controls will be instituted Eurozone-wide ahead of any break-up.

Regards,