Gold has remained robust despite the potentially negative short term implications for safe haven demand due to Bin Laden's murder. This suggests that market participants do not believe that Bin Laden's death is of any great importance or that participants realise that the global economy faces greater challenges than that of Bin Laden and al Qaeda.
Cross Currency Table
Gold's robustness also suggests that some participants believe that while Bin Laden's death is of no great importance, there is a continuing geopolitical risk posed by global terrorism, state-sponsored terrorism and war.
US relations with nuclear armed Pakistan look set to deteriorate after Osama's demise on Pakistani soil. Tensions with Pakistan and the already unstable situation in the Middle East and North Africa should see continuing safe haven demand for gold.
Gold in USD - 3 Day (Tick)
The Bin Laden death will likely prove to be a brief, but welcome, distraction for the Obama administration and other governments who are confronting an extremely difficult economic situation with deepening inflation, the euro zone debt crisis and the deteriorating economic situation and nuclear catastrophe in Japan.
Gold is a barometer and is sensing that Bin Laden's death and burial at sea is a mere sideshow when compared to the real macroeconomic, monetary and geopolitical risk facing the world today. Even at these price levels, demand for gold remains robust, particularly in India (see News), China and Asia.
Silver in USD - 20 Day (Tick)
Silver remains vulnerable to further short term weakness and the concentrated shorts may attempt to press their advantage after the CME raised margins once again. However, the very sound supply and demand fundamentals mean that long term physical buy and hold buyers will continue to be rewarded.
Leveraged speculation should as ever be avoided with gold and particularly silver as intervention and manipulation can result in short term sharp price drops which can wipe out those trading with margin or leverage.
Bullion buyers buying with cash and not debt are not subject to these losses and are thus strong hands who can ride out price pullbacks and be rewarded for their long term prudence.
Gold is trading at $1,545.65/oz, €1,044.60/oz and £938.08/oz.
Silver is trading at $43.83/oz, €29.62/oz and £26.59/oz.
Platinum Group Metals
Platinum is trading at $1,857.00/oz, palladium at $767/oz and rhodium at $2,250/oz.