Julian Phillips - Price Drivers
"The bad news just doesn't stop. Today we heard that Germany's economy will shrink by 0.5% in 2012 and by 1.5% in 2013. Of course the other, weaker members of the Eurozone will fare worse. It could not have come at a worse time. Austerity measures in themselves are shrinking each national country that applies them. This gives local economies the double whammy as government itself is a source of growth. Expectations are growing that the Eurozone will break up. We don't see this as a break-up en masse, but individual weak members leaving. The remaining members will show far greater economic strength pushing the euro itself higher, despite the recession.
"But today the euro continues its weak tone. Reasonably, the gold price has severed any perceived connection to the euro and continues to rise against it as you can see below. Today and the days ahead will demonstrate just how gold can act independently of currencies.
"2012 is going to be a very different year than 2011 and we do expect fundamental changes in so many facets of the global economy. In the weeks to come, we will give our forecasts on what we feel are the pertinent facets to the gold price, such as oil, currencies and in depth aspects of the gold market."