From Adrian Ash<\/p>\n
\nBullionVault<\/a><\/p>\n \nAnd 2011 Economic Fears “Still Positive” <\/strong><\/p>\n <\/strong><\/p>\n \nTHE PRICE OF GOLD<\/strong> and silver bullion both fell as London \u2013 center of the world’s precious metals markets \u2013 got back to work from the New Year shutdown on Tuesday, dropping 1.3% and 2.2% respectively from yesterday’s Dollar highs as world stock markets caught up with Wall Street’s strong gains.<\/p>\n \nThe US Dollar whipped lower on the forex market, helping the gold price in Euros further extend its drop to 1-week lows, down some 1.3% from Thursday’s new all-time high of \u20ac34,586 per kilo.<\/p>\n \nUK investors wanting to buy gold today saw the price briefly drop through \u00a3900 per ounce, down 2.3% from yesterday’s new record high.<\/p>\n \n“Short-term technicals remain in favor of further gains across the sector,” reckons Stefan Graber in Singapore for Credit Suisse.<\/p>\n \n“Gold is aiming for the $1425 resistance level, while a decisive break above $31 would open the way for silver prices to test $32.50.”<\/p>\n \n“The next major [silver] target remains the 1980 high of $49.50,” says Scotia Mocatta’s latest technical note, forecasting further falls in the ratio of gold to silver prices.<\/p>\n \nAveraging 53 over the last four decades, the ratio of gold to silver prices hit a 13-year peak above 80 as silver plunged amid the financial crisis of late 2008.<\/p>\n \nNow the Gold\/Silver Ratio is “closing in on our 2006 low of 44.08,” reckons Scotia.<\/p>\n \nThe US Mint says it sold nearly 1.7 million silver bullion coins on Monday, the first day of American Eagle 2011 sales \u2013 equal to almost 5% of last year’s entire silver coin sales.<\/p>\n \nFull-year 2010 saw the Mint sell 1.3 million 1-ounce gold coins, down 14% on 2009. Monday’s gold coin sales reached 8,500.<\/p>\n \nGold bullion held in trust by the world’s largest exchange-traded gold fund \u2013 New York’s GLD \u2013 meantime swelled 13% to 1280 tonnes in 2010, peaking at 1320 tonnes in June.<\/p>\n \nSpeculators in US gold futures and options cut their bullish betting, however, reducing their “net long” position (of long minus short contracts, as a group) from 931 tonnes equivalent to 884 tonnes over the last 12 months.<\/p>\n \nAveraging the equivalent of 627 tonnes over the last 5 years, the net long speculative position in US gold derivatives peaked at 1021 tonnes in Oct. 2009.<\/p>\n \n“If the Dollar has any negative impact on gold, it’s only short-term. The market is still on the positive side,” says Heraeus refinery’s Dick Poon in Hong Kong, speaking to Reuters.<\/p>\n \n“There are still worries about the economy in the Eurozone. For the long term, people would want to put money in commodities, metals.”<\/p>\n \nA survey of 78 professional economists \u2013 including 10 former Bank of England policymakers \u2013 today says a European debt crisis, high inflation and the negative effects of government cuts are the top 3 risks to the economy in 2011.<\/p>\n \n“The Fed\u2019s gung-ho approach to quantitative easing, supplanted by the Administration\u2019s tax-cutting zeal, stands in marked contrast to the Eurozone,” says Steve Barrow, chief currency strategist at Standard Bank, in his 2011 outlook today.<\/p>\n \n“One side could be vindicated, while the other suffers \u2013 although there\u2019s an even greater risk that both will be wrong.”<\/p>\n \nNew data from the Eurostat agency today said Eurozone price inflation rose to a two-year high of 2.2% annually in Dec. \u2013 just above the European Central Bank’s 2.0% target.<\/p>\n \nWithin the figures, both German and Spanish data “surprised” analysts says the FT<\/em>‘s Alphaville blog.<\/p>\n \nMajor government bond prices fell early Tuesday, led by a drop in UK gilts that nudged the yield offered to buyers of 10-year debt up to 3.48%.<\/p>\n \nLondon’s FTSE100 share index meantime jumped 2.4% to catch up with strong gains in Europe and the US on Monday.<\/p>\n \nSilver miner Fresnillo led the jump, gaining almost 6% at the start of trade after King World News said that Mexican industrialist Carlos Slim, reputedly the world’s richest man, is considering a takeover of the world’s No.1 primary silver miner \u2013 a rumor first reported in the UK press last May.<\/p>\n \nAdrian Ash<\/p>\n \nBullionVault<\/a><\/p>\n \nGold price chart, no delay<\/a> |\u00a0\u00a0 Buy gold online at live prices<\/a><\/p>\n \nFormerly City correspondent for The Daily Reckoning in London and head of editorial at the UK’s leading financial advisory for private investors, Adrian Ash<\/strong> is the editor of Gold News<\/a> and head of research at BullionVault<\/a> \u2013 winner of the Queen’s Award for Enterprise Innovation, 2009 and now backed by the mining-sector’s World Gold Council<\/a> research body \u2013 where you can buy gold today<\/a> vaulted in Zurich on $3 spreads and 0.8% dealing fees.<\/p>\n