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Silver Market Morning

Gold Today – New York closed higher at $1,561.20 and at London’s early morning fell back to $1,556. The euro was weaker at the time London at €1: $1.2560 before holding that level at €1: $1,2562. It Fixed at $1,558.50 and in the euro at €1,239.265. Ahead of New York’s opening gold stood at $1,562.00 and in the euro, €1,242.14 while the euro was at €1: $1.2575. [To follow our weekly commentary, please subscribe to our newsletters at and at].


Silver Today - Silver opened at $27.83 in London, the same as its New York close and slipped later to stand ahead of New York’s opening at $27.95.


Silver (very short-term)


Silver should continue to consolidate with greater volatility, today in New York today.


Price Drivers

Gold – One of the fundamental drivers of the gold price is Indian demand. Indian demand relates to gold prices in the Indian Rupee. These continue to rise as the Rupee continues to spiral down out of control at Rs.56.17 against the dollar, having fallen 4% this week. This is prompting a strong rise in sales of ‘scrap gold’ [recycled – sales of gold jewelry in the hope of price falls when it will be re-purchased] inside India, almost cutting off imports of gold. This leaves the market held up by Chinese demand and central bank demand, with a little investment demand from the developed world.


At some point in time the Indian investor in gold will realize that the Indian price of gold is not rising, but the Rupee falling. Once this happens, we expect Indian demand for gold to return in a rush. But how long does it take for people to fully understand that their currency is a poor measure of value?


Meanwhile traders hold the reins in the gold market at the moment and have free rein to push it this way and that as the price-insensitive central banks simply take the offers they receive and refuse to chase prices. Chinese demand is carrying the demand load at the moment in a tight, low volume, almost apathetic market in the developed world.


That’s why we are not seeing gold acting as a counter to the dollar but gold moving down with the euro. This type of action we feel will have an expiry date because it does not reflect gold or silver fundamentals, or moves of the dollar against the world’s currencies.


Silver – Silver moves are greater than gold’s, both ways. In silver, supply and demand factors are moving into balance. The implication is that if there is a surge in investment demand, silver may rise in percentage terms more than gold.




Julian D.W. Phillips for the Gold & Silver Forecasters

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