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Time to look at the long term fundamentals. European investors wary of Banks!
|
Week ending 29th March 2013 ($USD) |
Gold |
Silver |
|
Close this week |
$1,598.25 |
$28.64 |
|
Close previous week |
$1,607.75 |
$29.06 |
|
Gain/ <Loss> % for the week |
-0.59% |
-1.45% |
|
High Close for the week |
$1,603.00 |
$28.83 |
|
Low Close for the week |
$1,598.00 |
$28.330 |
The so-called 'axis' of the European financial system (Brussels, International Monetary Fund and European Central Bank) have sold out on people who are deemed rich by allowing a deal to keep Cyprus afloat but only after bank deposits of greater than €100,000 were raided with losses of up to 40% on uninsured deposits.
In normal bankruptcy scenarios, bank depositors are the first to receive their funds... apparently this is no longer the case in Europe! The message is loud and clear that depositors in Europe are not safe and the implication could be significant in coming weeks and months.
The result could be that many large depositors with Banks will withdraw funds and invest in specific government guarantee bonds or other safe investments... physical Gold.
Other news from Europe has centred on Italy where a political stalemate will likely result in another election. The credit markets in relation to Italy are once again on tender hooks.
Meanwhile in the Asia Pacific, North Korea declaring war on South Korea could develop into a situation that escalates in coming weeks. The USA are sending Stealth fighter jets to South Korea to lend support if required.
The Aussie $ has benefited from these events and continues to be strong at around US$1.04.
Although this coming week after Easter is a short week, developments could drive more 'flight to safety' investment questions.
A 'Technicals' Update:
Gold for now has strong support at just under US$1,600 and we continue to hold our view that is Gold breaks through US$1,620 it will then likely test the top of a bearish trend channel at US$1,643.
Silver has been struggling of recent times and the downward pressure may continue in coming weeks. However Silver will likely benefit from solid support in Gold.
The longer term outlook for Gold and Silver remains strong.
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