By Barry Stuppler – MintStateGold.com
Gold fell today as concern about a potential Greek default drove the dollar higher and some investors sold the metal to cover losses resulting from margin calls on the world’s equities markets. The U.S. Dollar has rallied almost 6% versus the Euro (from 1.44 to 1.36 Dollars to the Euro). At 11am PDT Gold is trading at $1,810.20, down $51.20 per ounce with very active trading.
If gold could just stay in the $1800 to $1900 trading range for a couple weeks it would be very bullish. We need a strong base for the next leg up as we move into the strongest demand period of the year. With a strong base, Gold could easily see the $2,000 barrier broken within 60 days.
Silver has been trading actively overnight in Asian and European markets. The low/high range has been from $40.03 to $41.92. At 11am PDT silver is at $40.15, down $1.55 per ounce on heavy trading. There is some selling caused by the U.S. Dollar hitting a six month high against the Euro, and liquidity selling to meet equity market margin calls.
Indian demand for gold and silver will begin in 15 days as the festivals and weddings start. That demand is expected to gain pace, and peak in October and November, before tapering off in December.
Eurozone Debt Update
It’s being reported that Germany’s central bank is preparing a Greek default by a massive recapitalization of German banks. The size of this recapitalization hasn’t been disclosed because it isn’t known how much Greek debt is on the bank’s balance sheets.
Major French banks might be downgraded by Moody’s Investors Service this week because of their exposure to Greek-government debt.
Other Important news that affects precious metal prices:
China’s trade surplus totaled $17.8 billion in August, according to reports citing government data, down from $31.5 billion in July. The result was well below expectations for a trade surplus of $23.4 billion, according to a survey of economists compiled by Dow Jones Newswires.