Gold News

Gold's Summer Sale: Last Days!

Gold and silver are nearing the end of this summer's savage correction...

WE'RE COMING to the close of the summer sale season for Gold and, following this summer's sharp correction, entering the main annual gold season in the final quarter of the year, believes Julian Phillips, the

   Many US players will soon wind up their summer holidays and return to the Gold Market. Indian physical buying has re-entered the market as a real force, taking up bargain-sale prices as an early entry to their traditional gold-buying season.

   The main driver of Gold of late had been US selling – primarily from the speculative and leveraged futures market of Comex contracts, rather than of physical bullion itself. Investment demand showed uncertainty at first, and as net sellers of small amounts, this left private investors at the mercy of short-term traders. They pressed the metal down until this vigorous support was shown.

   Below $800 an ounce, this support has been visibly resistant to these pressures however. You can see that in the bounce we're now witnessing.  

   Separately, the US Dollar is now struggling to hold its ground at $1.46 against the Euro.   The malaise of the US economy is by no means over, as the former chief economist of the International Monetary Fund (IMF) now warns of a really big bank going bust before long.

   Fannie Mae and Freddie Mac are still ringing alarm bells for anyone who cares to listen, as the cost of financing their bonds is rising, again threatening a failure of equity support and a likely bail-out from the Fed. That would only emphasize that the broader credit crunch is worsening.  

   The US consumer is not yet in a position to add to the inflation seen in this week's wholesale price data – now running at a 27-year record. So we would expect the Fed to allow inflation to go untended, relying on deflation in other quarters besides consumer prices to dampen it.

   Expect the Fed to try and nurse already fragile growth instead. This translates into slower capital investment into the United States from Asia and the Middle East, plus a continuation of the trade deficit at unacceptable levels, leaving the Dollar to turn down again shortly – and sharply.

Gold and silver are nearing the end of the savage correction they have endured this summer.

JULIAN PHILLIPS – one half of the highly respected team at – began his career in the financial markets back in 1970, when he left the British Army after serving as an Officer in the Light Infantry in Malaya, Mauritius, and Belfast.

First he worked in Timber Management and then joined the London Stock Exchange, qualifying as a member and specializing from the beginning in currencies, gold and the "Dollar Premium". On moving to South Africa, Julian was appointed a macro-economist for the Electricity Supply Commission – guiding currency decisions on the multi-billion foreign Loan Portfolio – before joining Chase Manhattan and the UK Merchant Bank, Hill Samuel, in Johannesburg.

There he specialized in gold, before moving to Capetown, where he established the Fund Management department of the Board of Executors. Julian returned to the "Gold World" over two years ago, contributing his exceptional experience and insights to Global Watch: The Gold Forecaster.

Legal Notice/Disclaimer: This document is not and should not be construed as an offer to sell or the solicitation of an offer to purchase or subscribe for any investment. Gold Forecaster/Julian D.W. Phillips have based this document on information obtained from sources they believe to be reliable but which it has not independently verified; they make no guarantee, representation or warranty and accepts no responsibility or liability as to its accuracy or completeness. Expressions of opinion are those of Gold Forecaster/Julian D.W. Phillips only and are subject to change without notice. They assume no warranty, liability or guarantee for the current relevance, correctness or completeness of any information provided within this report and will not be held liable for the consequence of reliance upon any opinion or statement contained herein or any omission. Furthermore, they assume no liability for any direct or indirect loss or damage or, in particular, for lost profit, which you may incur as a result of the use and existence of the information, provided within this report.

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