GOLD 0.51% $1,391.7 gold futures

shortterm pressure

  1. 1,214 Posts.
    As part of yesterday's Fed/ECB/BoE/Swiss liquidity package, the US Fed announced that they would provide the others with tens of billions of $US, in order to assist with liquidity (their problem being the number of $US assets and loans the Euro banks wrote in the good times - now, they're having trouble finding enough $US to pay up, because the other banks need all the $ they can get to meet their own commitments).

    As a result, there will be a fair bit of "official" currency action in the next few days, whereby the Euro banks exchange sterling, Euro and Swissie for their brand newly-minted $US. One should expect an orderly, but consistent, decline in these currencies vs the $US until the transaction is complete. I think it started this evening:-

    Image and video hosting by TinyPic

    Gold will struggle (in $US) while this is going on.


 
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