Silver Market Morning

Gold Today –On Friday the gold price in New York closed higher at $1,254 with Asia lifting it $1.2 higher to $1,256. The dollar was stronger at $1.3556: €1. In London the gold price was Fixed at $1,254.75 up $13.75 on Friday. In the euro, it Fixed at €925.878 up €13.246. Ahead of the opening in New York gold stood at $1,254.90 and in the euro at €925.99. The dollar stood at $1.3551: €1

Silver Today –The silver price on Friday closed at $20.30 with Asia lifting it to $20.31 before London’s opening. Ahead of New York’s opening, it was trading at $20.35.

Gold _{(very short-term)}

We expect a positive performance by the gold price today, in New York.

Silver _{(very short-term)}

We expect a positive performance by the silver price today, in New York.

Price Drivers

Friday saw purchases into the SPDR gold ETF of 7.498 tonnes but no movement in the Gold Trust gold ETF leaving their respective holdings at 797.054 and 161.37 tonnes respectively. We expected to see sales on a Friday and have not seen purchases of this size since 2012 when gold prices were over $1,700. [Find out more from www.GoldForecaster.com and www.SilverForecaster.com to subscribe to our newsletters and visit www.StockbridgeMgMt.com to hold gold so it can’t be seized]

Could this be the turning point in the precious metals market?

As you know we at Gold Forecaster have been focused on U.S. gold selling via the U.S. based gold ETFs. And as you know the SPDR gold ETF is the vehicle of choice for U.S. institutions. This fund has sold off around half its holdings in the last 1+ year against a 33% sell off of total U.S. gold ETFs. We have been looking to see when the selling would stop, not when purchases would begin. This purchase surprised us particularly as it is a substantial amount of gold. Bear in mind that the gold market has been in rough balance for the last few months, so a change like this tips the see-saw. This aspect of the gold market is now center stage!

China has reported a growth rate higher than government targets at 7.7%. After the tremendous growth of the last 15+ years at 10%+, lower growth rates indicate that after building the shell of the economy, the inside body of China’s economy is now being built. This is the development of the people, whose economic growth is necessary for the economy to become self-sustainable and independent of the developed world. To gold investors this is critical, because of the Chinese propensity to acquire physical gold for financial security. This is more than a generational trend. It is an intrinsic facet of Chinese thinking. Therefore this news continues to be extremely gold positive.

The announcement of a Yuan priced gold contract on the Shanghai gold exchange adds to this concept as now foreigners who wish to buy this product must sell dollars to buy Yuan so they can buy this gold contract. This is step towards Yuan convertibility and a sign of things to come when the Yuan will be a currency that can stand alone without the dollar.

Silver – The silver price is moving up with gold and may well run ahead of it.

Regards,

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