Gold & Silver Market Morning, February 29 2012

New York lifted the gold price to $1,785 before Asia and London took it slightly higher to $1,788 after its opening. The euro is steady at yesterday’s levels at €1: $1.3453. In London, gold Fixed at $1,788.00 up $13 and in the euro at €1,329.961 up €8. The euro just slightly weaker at €1: $1.3438 in front of New York’s opening. Gold stood at $1,784.35 and at €1,328.58 at that time.

Silver opened strongly at $36.97 after New York closed at $36.89. Ahead of New York’s opening it rose further to still stood at $37.15.

Gold _{(very short-term)}

Gold will show more strength, in New York today.

Silver _{(very short-term)}

Silver will show more strength, in New York today.

Price Drivers

Today the E.C.B. will release another unlimited offer of 1% money to the European banks. This has and will continue to ward off a banking crisis. But it is quantitative easing, by another name. The amount lent today is at $712 billion up from $489 billion in the previous tranche. This is remarkably gold supportive as once again the value of currencies is undermined. It is hoped that it will find its way into the broad economy and stimulate growth. Be warned though, if it fails to do this, it is measuring the slowing velocity of money in Europe and the extent of real deflation. If this is the case, such loans will not be the end of the story!

You can be sure that central banks on both sides of the Atlantic will do everything they can to fight against deflation! [To get more of the right perspectives on the gold and silver markets and where gold and silver prices are going, subscribe through www.GoldForecaster.com or www.SilverForecaster.com].

Across the pond in the U.S. the Yields on Treasuries have begun to fall as investors move from cash and fixed interest securities to equities. This is no more than investors discounting a recovery in the States. It is likely to be a foretaste of the horrible Treasury market on the way. Foreign investors stand to lose a considerable amount and have every incentive now to move across to the better yielding Eurozone stocks. When yields rise prices fall, so better to wait for the price falls to complete their course before re-entering the market. If foreign investors feel that way, the capital account of the U.S. balance of payments will suffer badly forcing the dollar down. After all there is almost no likelihood of the Trade balance turning to a surplus from a deficit.

The gold price is reflecting the performance of the euro more than the price of gold in the dollar. In the euro it remained steady against yesterday’s level. Silver demand globally is strong and dominating supply as you can see in the spectacular rise we are now seeing in the silver price.

Regards,

Julian D.W. Phillips for the Gold & Silver Forecasters