Gold is up on dip buying after yesterday's sell off. Japan's earthquake shook down dollar below 77, yet the yellow metal stayed almost neutral at the end of the day. Prices need a boost to jump over the old highs. If the boost does not arrive on time, we are looking at the 3rd failed attempt to break above the old highs, a down trend move in short term and possibly prices below $1,400 an ounce next week. The long term prediction stays bullish on fundamentals.
King Abdullah of Saudi Arabia handled the “day of rage” protest by pouring police to the streets. Reports say the demonstrations today have been confined to the Shiite dominated eastern part of the country. King is handing out $36B or about $1,400 per person in addition to the $385B that has already been pledged in a 5-year spending plan that is aimed to "help tackle joblessness and stop young men from turning to more radical Islam."
What can boost the precious metal prices is the news from Europe. Despite a $153B bailout for Greek the 10-year bonds are already back to record highs this week.
Markets are becoming more fearful of a Greek government default and are now expecting it to happen more quickly than a few months ago, … Greece is as far away as ever from convincing investors that it can get its public finances on a stable footing.
- Economist Ben May
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