It is, perhaps, significant that yesterday’s rapid upturn taking the gold price up around $15 to touch the $1,250 level and silver trading comfortably above $19 again, occurred as the U.S. markets opened after the precious metals traded flat to downwards in Europe and this is indicative of sentiment: The European economy is seen by some as being in better shape at the moment than that of the U.S. – indeed latest growth figures out of Germany and the U.K, are relatively promising – although the latter’s economic nightmare time may still be to come. The other significant buying area, Asia, just seems to sit tight for the moment not really moving prices either way
But in the U.S. things are not looking so rosy. Housing has been turning down again, employment is not getting any better, several of the country’s biggest States are facing near bankruptcy, although it’s unlikely the Fed will let them go to the wall, and we’ve just seen a report suggesting U.S. auto sales in August are the worst for nearly 30 years. So much for the green shoots of recovery there then! Yet only a month or so ago the optimists were predicting a relatively quick end to recession. Who do you believe? There do seem to be occasional positive signs for the economy but they are still being outweighed by the negatives. Housing data this week will be watched with interest and if worse than expected could take gold close to its high point again.
Where the U.S. leads, of course, Europe invariably follows and the early growth hopes which have been spotted of late may also well be nipped in the bud in an autumn array of pessimistic projections.
Let’s face it, Europe certainly isn’t out of the financial mess yet. Debt levels are horrendous, deficits are ongoing and some country’s economies are in a really drastic mess – even if not quite as bad as those for U.S. States like California, llinois, New York, New Jersey and Michigan, all of which have bigger economies than many Eurozone countries.
Now gold and silver are running up in price – or at least maintaining decent levels, and stock markets are mostly drifting downwards, at a time of relatively low activity as most of the fat financial cats are not yet back from their holidays. Thus trading activity is a little limited and probably…
