Silver Market Morning

Gold Today –New York closed at $1,309.90 up 40 cents on Tuesday slipping in Asia and London to the $1,300 level. It then Fixed at $1,299.75 down 17.50. In the euro it Fixed at €973.158 down €12.50. Ahead of New York’s opening gold was trading at $1,301.30 and in the euro at €987.13.

Silver Today – Silver closed at $21.72 up 2 cents on Tuesday. Ahead of New York’s opening it traded at $21.55.

Gold _{(very short-term)}

The gold price will continue to consolidate, today in New York.

Silver _{(very short-term)}

The silver price will continue to consolidate, in New York today.

Price Drivers

Gold & Silver – Gold retreated ahead of the announcements from the Fed later today. This is not surprising as the markets will brace themselves for the worst possible outcome. However, we stress that there is a thin market with no U.S. selling going on and China’s demand remaining robust.

Dealers have the ability and propensity to adjust their prices so they don’t get hurt, which is where lower prices are coming from at the moment. Gold continues to sit on support despite these price moves. When a market is like this, it is not wise to take prices as the real reflection of market demand and supply because of the thinness of the market and dealers simply moving prices around with little to no deals.

The gold Fixing reflects the remaining balance of market demand and supply that is not netted out, in house, by the five Fixing member’s, who are bullion banks. The advantage of the Fixing is that all involved including the in-house clients of the bullion banks see the way the gold fixing is going and can adjust their own sales and purchases in line with the prices looked at. Because of this they do get the right price reflecting that moment’s demand and supply balance. That’s why the gold fixing is so important. Prices outside the fix may be trying to find a price that is searching for deals and not a real price.

Indeed, one should also note that most sales of physical gold don’t go through the market but simply refer to the market price as the basis for a contract. As an example where a central bank buys local production the miners are referred to the daily Fixings as such a reference point. That gold does not get shown to the market either, it goes from the mine to the nation’s vault. [Enquire at: admin@StockbridgeMgMt.com to hold gold so it can’t be seized]

The SPDR and Gold Trust gold ETF holdings are unchanged again today leaving the total of the SPDR gold ETF holdings at 911.119 tonnes while the holding of the Gold Trust remains at 177.56 tonnes, together totalling 1,088.679 tonnes.

Silver – The silver price continues to follow gold down ignoring its own fundamentals.

Regards,

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