Monday, May 28, 2012

Central Banks and China provide solid support for the gold price


Past week marked another V-type move in the gold price and silver price. The good news though is that the previous low has not been broken, but we rather saw a higher low. Especially in gold, a remarkable  bounce occured intraday on Wednesday, after the trading session started with a sharp price drop.
It seems that the gold price is not allowed to move lower, at least for now. We’ll need to watch the price action over the coming weeks. Tensions over Europe are increasing and the faith of the European currency and banking system is in the hands of the politicians. The speed and type of their decisions will determine to a great extent the effect on the economy, stock markets, the gold and silver price but maybe even more important on the psychology of investors worldwide … at least in the short run.
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