Silver Market Morning

Gold Today –New York closed at $1,302.40 down $5.30 on yesterday. Asia saw the gold price fall to $1,293 ahead of London’s opening where it held through the morning. It then Fixed in London at $1,292.00 down $19 and in the euro at €972.965 down nearly €14.00. Ahead of New York’s opening gold was at $1,296.00 and in the euro at €975.54.

Silver Today – Silver closed at $19.68 in New York yesterday. Ahead of New York’s opening it traded at $19.80.

Gold _{(very short-term)}

The gold price will fight to hold above $1,290 with a weaker bias, in New York.

Silver _{(very short-term)}

The silver price will cautiously follow gold, in New York today.

Price Drivers

Gold & Silver – Yesterday saw sales of 3.906 tonnes from the SPDR gold ETF, probably the main cause of the fall through $1,300, leaving the total of the SPDR gold ETF and the Gold Trust at 1,095.50 with the SPDR gold ETF at 917.139 tonnes, while 0.49 of a tonne was sold from the Gold Trust leaving its gold holdings at 178.36 tonnes now. Once again sales in the thin market are having a disproportionate impact on the gold price and will continue to do so. This will only change in September as the demand for gold for the year end really picks up. [Subscribe to our newsletters at www.GoldForecaster.com and www.SilverForecaster.com]

As we said at the end of last week;

We expect precious metal markets to remain volatile and surprising!

The Pakistan government has banned gold imports for a month. Gold imports were allowed duty free, provided the gold was then exported. What an invitation to smugglers there, to import it and slip it across a very long border to the Indian market. The month long ban will end in enough time, ahead of the Indian festive season, for smuggling to start up again. Will India/Pakistan succeed in halting gold inflows to India? History tells us, no they will not! At best the government will be able to report that “official” statistics have dropped to 845 tonnes imported into India in 2013. But few will believe these numbers. Pakistan and Dubai gold turnover figures will likely be at record levels by then, alongside record gold premiums.

The global “gold season” starts in four weeks time. In India, investment demand starts at the end of the harvest then too. Ahead of that, we are seeing premiums on the gold price there rising rapidly. They are currently over $35, as the government tries to strangle imports of gold.

But what will happen to U.S. gold ETF sales? If we are right that they are supportive of short positions, we expect to see these greatly reduced and physical sales of gold halt by then. After that we expect to see a ‘precipitous moment’ in the gold world, in its entirety!

Silver – The silver price continues to follow gold, cautiously.

Regards,

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