Due to the impact of European debt crisis, capital inflow in gold market hit a high record

Gold market continuously rose last week. This upward trend has continued for ten days since the holidayof the U.S. Independence Day on July 4. The intra highest price was moving upevery day,eventually hitting a historical high record on Friday at 1,598.20 USD which is close to the target 1,600.

The overall trend of gold last week was affected bythe debt crisis. Financial markets worried that the debt crisis would not as soon be remedied as the previous few times. This time, the European countries, especially more powerful ones, Germany and France, did not response directly. In this case we all concern that the high debt countries are no longer far from default. Due to the domino effect, even Italyhas also been dragged down.
The U.S. was also in trouble. The politicaldisputebetween Democratic and Republican turned the U.S. treasury bondsinto their "rivalchips". If the U.S. cannot borrow again, it will not be able to repay the debt and then even the U.S. bonds will be in default. The global financialmarkets will suffer from severe impacts. Where do the capital stay rather than putting in gold market?As the U.S. economy remains weak, the Federal Reserve tried to test if there is need for the third round of quantitative easing policy. Once it is introduced, in the proliferation of capitals, inflation will push up again. Gold will be therefore the first choice in the investment.

Gold was still in high level or even had another record high in short-term due to the flavoring factors and the inflow of capital. Since the current price is at highrecord, and the technical trend is strong, but the price is more difficult to be located, investors should take more references and consider the market sentiment, especially the changes of the European debt. Gold pricethis week,estimated to be widen, with volatility in between 1,550 to 1,620 USD.It is possiblethat gold breaks above 1,600but it still depends on the momentum at high level.

Silver was also strong last week, and the price trend was going up and up. However, due to the earlierpolicyof risk tightening, silver's high price of39.40 USD last week was not a historical high as if what gold performed.The price of silver has more rising potential than gold, but their marketstructures are different so that it cannot be a single consideration. The price volatility this week is estimated to be between 35 and 42. Silver's investment risk is higher than gold.